Critical Analysis: Inter & Co. Inc. (NASDAQ:INTR) versus First Community (NASDAQ:FCCO)

Inter & Co. Inc. (NASDAQ:INTR) and First Community (NASDAQ:FCCO) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, profitability, dividends, institutional ownership, risk and earnings.

Earnings & Valuation

This table compares Inter & Co. Inc. and First Community”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Inter & Co. Inc.	$1.93 billion	0.88	$235.05 million	$0.66	5.85
First Community	$114.00 million	2.71	$19.20 million	$2.86	11.51

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

Institutional and Insider Ownership

22.9% of Inter & Co. Inc. shares are held by institutional investors. Comparatively, 61.3% of First Community shares are held by institutional investors. 8.8% of First Community shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Dividends

Inter & Co. Inc. pays an annual dividend of $0.11 per share and has a dividend yield of 2.8%. First Community pays an annual dividend of $0.68 per share and has a dividend yield of 2.1%. Inter & Co. Inc. pays out 16.7% of its earnings in the form of a dividend. First Community pays out 23.8% 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 has raised its dividend for 4 consecutive years. Inter & Co. Inc. is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a summary of current recommendations and price targets for Inter & Co. Inc. and First Community, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Inter & Co. Inc.	1	3	3	0	2.29
First Community	0	0	2	0	3.00

Inter & Co. Inc. presently has a consensus target price of $9.30, suggesting a potential upside of 140.93%. First Community has a consensus target price of $37.50, suggesting a potential upside of 13.91%. Given Inter & Co. Inc.’s higher probable upside, research analysts clearly believe Inter & Co. Inc. is more favorable than First Community.

Profitability

This table compares Inter & Co. Inc. and First Community’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Inter & Co. Inc.	11.23%	14.94%	1.57%
First Community	19.55%	13.73%	1.24%

Volatility & Risk

Inter & Co. Inc. has a beta of 1.01, suggesting that its share price is 1% more volatile than the S&P 500. Comparatively, First Community has a beta of 0.33, suggesting that its share price is 67% less volatile than the S&P 500.

Summary

Inter & Co. Inc. beats First Community on 9 of the 17 factors compared between the two stocks.

About Inter & Co. Inc.

Inter & Co., Inc. Is a holding company, which engages in the provision of financial products and services. It operates through the following segments: Banking, Securities, Insurance Brokerage, Marketplace, Asset Management, Service, and Other. The Banking segment offers checking accounts cards, deposits, loans and advances, and other services through mobile application. The Securities segment is involved in the acquisition, sale and custody of securities, the structuring and distribution of securities in the capital market, and the provision of administration services to investment funds. The Insurance Brokerage segment includes insurance products underwritten by insurance companies, such as warranties, life, property and automobile insurance, and pension products, as well as consortium products provided by a third party. The Marketplace segment operates a digital platform, which offers goods and services to its customers. The Asset Management segment is composed of the operations related to the management of fund portfolios and other assets. The Service segment consists of collection and management of personal information, development and licensing of customized computer programs, development and licensing of non-customized computer programs and technical support, maintenance, and other information technology services. The company was founded on January 26, 2021 and is headquartered in Belo Horizonte, Brazil.

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.