Analyzing First Community Bankshares (NASDAQ:FCBC) and First Bancorp (NASDAQ:FBNC)

First Community Bankshares (NASDAQ:FCBC) and First Bancorp (NASDAQ:FBNC) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, valuation, profitability, risk, dividends, earnings and institutional ownership.

Profitability

This table compares First Community Bankshares and First Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Community Bankshares	27.18%	10.70%	1.68%
First Bancorp	17.98%	8.00%	0.93%

Risk & Volatility

First Community Bankshares has a beta of 0.56, meaning that its share price is 44% less volatile than the S&P 500. Comparatively, First Bancorp has a beta of 1.04, meaning that its share price is 4% more volatile than the S&P 500.

Valuation and Earnings

This table compares First Community Bankshares and First Bancorp”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Community Bankshares	$174.62 million	4.79	$48.02 million	$2.79	16.38
First Bancorp	$546.25 million	3.60	$104.13 million	$2.48	19.18

First Bancorp has higher revenue and earnings than First Community Bankshares. First Community Bankshares is trading at a lower price-to-earnings ratio than First Bancorp, indicating that it is currently the more affordable of the two stocks.

Dividends

First Community Bankshares pays an annual dividend of $1.24 per share and has a dividend yield of 2.7%. First Bancorp pays an annual dividend of $0.88 per share and has a dividend yield of 1.9%. First Community Bankshares pays out 44.4% of its earnings in the form of a dividend. First Bancorp pays out 35.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. First Community Bankshares has increased its dividend for 13 consecutive years. First Community Bankshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of current ratings and price targets for First Community Bankshares and First Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Community Bankshares	0	1	0	0	2.00
First Bancorp	0	0	1	0	3.00

First Community Bankshares presently has a consensus target price of $38.00, indicating a potential downside of 16.85%. First Bancorp has a consensus target price of $56.00, indicating a potential upside of 17.75%. Given First Bancorp’s stronger consensus rating and higher possible upside, analysts plainly believe First Bancorp is more favorable than First Community Bankshares.

Institutional & Insider Ownership

35.0% of First Community Bankshares shares are held by institutional investors. Comparatively, 68.4% of First Bancorp shares are held by institutional investors. 3.7% of First Community Bankshares shares are held by company insiders. Comparatively, 3.7% of First Bancorp shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

First Bancorp beats First Community Bankshares on 9 of the 17 factors compared between the two stocks.

About First Community Bankshares

First Community Bankshares, Inc. operates as the financial holding company for First Community Bank that provides various banking products and services. It offers demand deposit accounts, savings and money market accounts, certificates of deposit, and individual retirement plans; and commercial, consumer real estate, and consumer and other loans. The company also provides trust management, estate administration, and investment advisory services; and investment management services. It serves individuals and businesses across various industries, such as education, government, and health services; coal mining and gas extraction; retail trade; construction; manufacturing; tourism; and transportation. The company operates through branches in West Virginia, Virginia, North Carolina, and Tennessee. Community Bankshares, Inc. was founded in 1874 and is headquartered in Bluefield, Virginia.

About First Bancorp

First Bancorp operates as the bank holding company for First Bank that provides banking products and services for individuals and small to medium-sized businesses. The company accepts deposit products, such as checking, savings, and money market accounts, as well as time deposits, including certificate of deposits and individual retirement accounts. It also offers loans for a range of consumer and commercial purposes comprising loans for business, real estate, personal, home improvement, and automobiles, as well as residential mortgages and small business administration loans; and accounts receivable financing and factoring, inventory financing, and purchase order financing services. In addition, the company provides credit and debit cards, letter of credits, and safe deposit box rental services, as well as electronic funds transfer services consisting of wire transfers; and internet and mobile banking, cash management, bank-by-phone services, and remote deposit capture services. Further, it offers investment and insurance products, such as mutual funds, annuities, long-term care insurance, life insurance, and company retirement plans, as well as property and casualty insurance products; and financial planning services. The company was founded in 1934 and is headquartered in Southern Pines, North Carolina.