Head to Head Comparison: First Community (NASDAQ:FCCO) and Coastal Financial (NASDAQ:CCB)

Coastal Financial (NASDAQ:CCB) and First Community (NASDAQ:FCCO) 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, institutional ownership, earnings, profitability, valuation, dividends and risk.

Insider and Institutional Ownership

59.2% of Coastal Financial shares are held by institutional investors. Comparatively, 61.3% of First Community shares are held by institutional investors. 16.8% of Coastal Financial shares are held by insiders. Comparatively, 3.0% of First Community shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and target prices for Coastal Financial and First Community, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Coastal Financial	0	0	1	1	3.50
First Community	0	0	1	0	3.00

Coastal Financial currently has a consensus target price of $54.00, suggesting a potential upside of 19.28%. First Community has a consensus target price of $21.00, suggesting a potential upside of 28.83%. Given First Community’s higher possible upside, analysts clearly believe First Community is more favorable than Coastal Financial.

Risk and Volatility

Coastal Financial has a beta of 1.25, suggesting that its share price is 25% more volatile than the S&P 500. Comparatively, First Community has a beta of 0.43, suggesting that its share price is 57% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Coastal Financial	6.55%	14.31%	1.11%
First Community	12.32%	8.57%	0.61%

Earnings & Valuation

This table compares Coastal Financial and First Community’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Coastal Financial	$537.55 million	1.13	$44.58 million	$2.86	15.83
First Community	$54.78 million	2.27	$11.84 million	$1.43	11.40

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

Summary

Coastal Financial beats First Community on 10 of the 14 factors compared between the two stocks.

About Coastal Financial

Coastal Financial Corporation operates as the bank holding company for Coastal Community Bank that provides various banking products and services to small and medium-sized businesses, professionals, and individuals in the Puget Sound region in Washington. It accepts a range of deposit products, including demand and savings accounts, time deposits, and money market accounts. The company also offers commercial and industrial loans, such as term loans, commercial lines of credit, capital call lines working capital loans, equipment financing, borrowing base loans, small business administration loans, and other loan products; owner and non-owner-occupied real estate loans, and multi-family residential loans; construction, land, and land development loans; residential real estate loans; and consumer and other loans, including automobile, boat and recreational vehicle, and secured term loans, as well as personal lines of credit, including overdraft protection. In addition, it provides remote deposit capture, online and mobile banking, and direct and reciprocal deposit services; and debit cards. Further, the company offers business accounts and cash management services, including business checking and savings accounts, and treasury services, as well as Banking as a Service (BaaS), a platform that allows broker dealers and digital financial service providers to offer their customers banking services. Coastal Financial Corporation was founded in 1997 and is headquartered in Everett, Washington.

About First Community

First Community Corporation operates as the bank holding company for First Community Bank that provides various commercial and retail banking products and services to small-to-medium sized businesses, professionals, and individuals. The company operates through Commercial and Retail Banking, Mortgage Banking, and Investment Advisory and Non-Deposit segments. Its deposit products include checking, NOW, savings, and individual retirement accounts; and demand deposits, as well as other time deposits, such as daily money market accounts and longer-term certificates of deposit. The company's loan portfolio comprises commercial loans that include secured and unsecured loans for working capital, business expansion, and the purchase of equipment and machinery; consumer loans, including secured and unsecured loans for financing automobiles, home improvements, education, and personal investments; real estate construction and acquisition loans; and fixed and variable rate mortgage loans. It also provides online banking, internet banking, cash management, safe deposit boxes, direct deposit of payroll and social security checks, and automatic drafts for various accounts. In addition, the company offers non-deposit investment products and other investment brokerage services; VISA and MasterCard credit card services; investment advisory services; and insurance services. The company was incorporated in 1994 and is headquartered in Lexington, South Carolina.