Reviewing Bank of Communications (OTCMKTS:BCMXY) & First Bancorp (NASDAQ:FBNC)

First Bancorp (NASDAQ:FBNC) and Bank of Communications (OTCMKTS:BCMXY) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, analyst recommendations, profitability, institutional ownership, valuation, risk and dividends.

Insider and Institutional Ownership

68.4% of First Bancorp shares are held by institutional investors. 2.0% of First Bancorp shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

First Bancorp pays an annual dividend of $0.96 per share and has a dividend yield of 1.5%. Bank of Communications pays an annual dividend of $0.97 per share and has a dividend yield of 4.0%. First Bancorp pays out 29.8% of its earnings in the form of a dividend. Bank of Communications pays out 26.5% 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. Bank of Communications is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

First Bancorp has a beta of 0.8, indicating that its share price is 20% less volatile than the S&P 500. Comparatively, Bank of Communications has a beta of -0.03, indicating that its share price is 103% less volatile than the S&P 500.

Earnings and Valuation

This table compares First Bancorp and Bank of Communications”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Bancorp	$549.30 million	4.90	$111.05 million	$3.22	20.20
Bank of Communications	$71.22 billion	1.01	$13.30 billion	$3.66	6.63

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

Profitability

This table compares First Bancorp and Bank of Communications’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Bancorp	22.12%	11.31%	1.46%
Bank of Communications	19.23%	7.91%	0.64%

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for First Bancorp and Bank of Communications, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Bancorp	0	3	2	1	2.67
Bank of Communications	0	1	0	0	2.00

First Bancorp currently has a consensus price target of $68.94, suggesting a potential upside of 5.99%. Given First Bancorp’s stronger consensus rating and higher probable upside, research analysts plainly believe First Bancorp is more favorable than Bank of Communications.

Summary

First Bancorp beats Bank of Communications on 12 of the 17 factors compared between the two stocks.

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.

About Bank of Communications

Bank of Communications Co., Ltd. provides commercial banking products and services in China. The company offers savings deposit products, including demand deposits, lump-sum deposits and withdrawal, time deposit of small savings for lump-sum withdrawal, interest withdrawal on principal deposited, time-demand deposit, call deposit, swap management, and education deposit; personal certificate of deposit; salary financing A; and foreign currency deposit. It also provides credit, quasi-credit, and debit cards; new housing and second-hand mortgage loans and unsecured personal loans; personal wealth management advisor services; and precious metal and commodity trading services. In addition, the company offers corporate structured deposit and corporate certificate of deposit; corporate cash management; industrial chain finance program comprising prepayment financing, inventory financing, accounts receivable financing and accounts payable financing; syndicated loans; corporation overdraft; investment banking services; and offshore banking services, such as repayment financing, inventory financing, accounts receivable financing and accounts payable financing, and forex currencies. Further, it provides bond account activation, bond distribution, and transaction services; related bond escrow and settlement, pledge registration, and principal and interest payment services; training and consulting services for cooperative banks; cross-border inter-bank payments system services; consignment sales of precious metal products; bond underwriting distribution; third party bond depository services; bank derivatives transfer; b-share transfer; bankfutures transfer; standard warehouse warrant pledged financing; institutional investment consulting, wealth management, and insurance services; and clearing and settlement services for future markets. The company was founded in 1908 and is headquartered in Shanghai, the People’s Republic of China.