CPB (NYSE: CPF) and First Community Corporation (NASDAQ:FCCO) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitability, dividends, risk, institutional ownership, earnings and analyst recommendations.

Earnings and Valuation

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
CPB $204.25 million 4.80 $47.79 million $1.57 20.50
First Community Corporation $36.89 million 3.71 $6.76 million $1.01 20.25

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

Insider and Institutional Ownership

91.4% of CPB shares are owned by institutional investors. Comparatively, 47.1% of First Community Corporation shares are owned by institutional investors. 4.1% of CPB shares are owned by company insiders. Comparatively, 8.6% of First Community Corporation shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Dividends

CPB pays an annual dividend of $0.72 per share and has a dividend yield of 2.2%. First Community Corporation pays an annual dividend of $0.36 per share and has a dividend yield of 1.8%. CPB pays out 45.9% of its earnings in the form of a dividend. First Community Corporation pays out 35.6% 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.

Analyst Ratings

This is a breakdown of current ratings and target prices for CPB and First Community Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CPB 0 2 1 0 2.33
First Community Corporation 0 0 1 0 3.00

CPB currently has a consensus price target of $30.25, suggesting a potential downside of 6.00%. First Community Corporation has a consensus price target of $21.00, suggesting a potential upside of 2.69%. Given First Community Corporation’s stronger consensus rating and higher probable upside, analysts clearly believe First Community Corporation is more favorable than CPB.

Profitability

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

Net Margins Return on Equity Return on Assets
CPB 22.59% 9.52% 0.90%
First Community Corporation 17.39% 8.24% 0.75%

Risk and Volatility

CPB has a beta of 1.16, indicating that its share price is 16% more volatile than the S&P 500. Comparatively, First Community Corporation has a beta of 0.81, indicating that its share price is 19% less volatile than the S&P 500.

Summary

CPB beats First Community Corporation on 11 of the 15 factors compared between the two stocks.

About CPB

Central Pacific Financial Corp. is the bank holding company of Central Pacific Bank (the Bank). The Company’s segments include Banking Operations, Treasury and All Others. The Banking Operations segment includes construction and real estate development lending, commercial lending, residential mortgage lending, consumer lending, trust services, retail brokerage services and its retail branch offices, which provide a range of deposit and loan products, as well as various other banking services. The Treasury segment is responsible for managing the Company’s investment securities portfolio and wholesale funding activities. The All Others segment includes activities, such as electronic banking, data processing and management of Bank-owned properties. The Company also offers wealth management products and services, such as non-deposit investment products, annuities, insurance, investment management, asset custody, and general consultation and planning services.

About First Community Corporation

First Community Corporation is a bank holding company for First Community Bank (the Bank). The Bank offers commercial and retail banking services to small-to-medium sized businesses, professional concerns and individuals, primarily in Richland, Lexington, Kershaw and Newberry Counties of South Carolina and the surrounding areas. The Bank offers a range of traditional banking products and services for professionals and small-to medium-sized businesses, including consumer and commercial, mortgage, brokerage and investment, and insurance services. The Bank also offers online banking to its customers. Its other services include Internet banking, cash management services, safe deposit boxes, traveler checks, direct deposit of payroll and social security checks, and automatic drafts for various accounts. The Bank offers non-deposit investment products and other investment brokerage services through a registered representative with an affiliation through LPL Financial.

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