First Bancshares (NASDAQ:FBMS) and FCB Financial (NYSE:FCB) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, risk, dividends, institutional ownership, analyst recommendations, earnings and valuation.

Dividends

First Bancshares pays an annual dividend of $0.20 per share and has a dividend yield of 0.6%. FCB Financial does not pay a dividend. First Bancshares pays out 11.4% of its earnings in the form of a dividend.

Institutional and Insider Ownership

58.9% of First Bancshares shares are owned by institutional investors. Comparatively, 89.1% of FCB Financial shares are owned by institutional investors. 11.8% of First Bancshares shares are owned by insiders. Comparatively, 9.6% of FCB Financial shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares First Bancshares and FCB Financial’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First Bancshares $80.43 million 5.99 $10.61 million $1.76 18.45
FCB Financial $409.12 million 4.18 $125.19 million $3.28 11.14

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

Analyst Recommendations

This is a breakdown of current ratings and target prices for First Bancshares and FCB Financial, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Bancshares 0 0 2 0 3.00
FCB Financial 0 3 3 0 2.50

First Bancshares currently has a consensus target price of $39.00, indicating a potential upside of 20.11%. FCB Financial has a consensus target price of $55.60, indicating a potential upside of 52.20%. Given FCB Financial’s higher possible upside, analysts clearly believe FCB Financial is more favorable than First Bancshares.

Volatility & Risk

First Bancshares has a beta of -0.04, meaning that its stock price is 104% less volatile than the S&P 500. Comparatively, FCB Financial has a beta of 1.35, meaning that its stock price is 35% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
First Bancshares 16.09% 10.01% 1.16%
FCB Financial 29.45% 13.02% 1.44%

Summary

FCB Financial beats First Bancshares on 11 of the 16 factors compared between the two stocks.

About First Bancshares

The First Bancshares, Inc. operates as the holding company for The First, A National Banking Association that provides general commercial and retail banking services. The company operates through three segments: Commercial/Retail Bank, Mortgage Banking Division, and Holding Company. It offers deposit services, including checking, NOW, and savings accounts; other time deposits, such as daily money market accounts and longer-term certificates of deposit; and individual retirement accounts. The company also provides commercial loans comprising secured and unsecured loans for working capital, business expansion, and purchase of equipment and machinery; consumer loans consisting of equity lines of credit, as well as secured and unsecured loans for financing automobiles, home improvements, education, and personal investments; and real estate construction and acquisition loans. In addition, it originates loans to purchase existing residential homes or construct new homes, and to refinance existing mortgages; and provides financial and wealth management services. Further, the company offers Internet banking services, voice response telephone inquiry services, commercial sweep accounts, cash management services, safe deposit boxes, travelers checks, mobile deposit, direct deposit of payroll and social security checks, automatic drafts for various accounts, automated teller machines, and credit card services. It primarily serves small to medium-sized businesses, professional concerns, individuals, associations and organizations, and governmental authorities. As of December 31, 2017, the company operated through a network of 3 full-service branches, 1 motor branch, and 4 loan production offices in the states of Mississippi, Alabama, Louisiana, and Florida. The First Bancshares, Inc. was incorporated in 1995 and is headquartered in Hattiesburg, Mississippi.

About FCB Financial

FCB Financial Holdings, Inc. operates as the bank holding company for Florida Community Bank, N.A. that provides various financial products and services to individuals, small and medium-sized businesses, large businesses, and other local organizations and entities in south and central Florida. The company offers various deposit products, including demand deposit accounts, interest-bearing products, savings accounts, and certificates of deposit; checking products; and money market accounts and IRAs. It also offers consumer loans, such as personal and auto loans, recreational loans, and home improvement/second mortgage loans. In addition, the company provides commercial credit products, such as lines of credit to finance working capital and trade activities; loans for owner occupied real estate financing; equipment financing; acquisition financing; construction financing, mini-permanent and permanent financing, acquisition and development lending, land financing, and bridge lending services to commercial real estate clients; and specialty financing services to owners and operators in the areas of aviation and marine lending, as well as participates in club lending structures. Further, it offers syndicated loans; credit cards and purchasing cards; and derivative products, such as interest rate swaps; treasury products; securities brokerage services, investment advice, and investment recommendations; and online and mobile banking, safe deposit boxes, and payment services. As of December 31, 2017, FCB Financial Holdings, Inc. operated through a network of 46 banking centers in Florida. The company was formerly known as Bond Street Holdings, Inc. and changed its name to FCB Financial Holdings, Inc. in June 2014. FCB Financial Holdings, Inc. was founded in 1923 and is headquartered in Weston, Florida.

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