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

Analyst Ratings

This is a breakdown of recent recommendations and price targets for LCNB and First Community, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
LCNB 0 2 0 0 2.00
First Community 0 0 1 0 3.00

LCNB currently has a consensus target price of $24.00, indicating a potential upside of 10.09%. First Community has a consensus target price of $21.00, indicating a potential downside of 8.10%. Given LCNB’s higher possible upside, equities analysts clearly believe LCNB is more favorable than First Community.

Earnings & Valuation

This table compares LCNB and First Community’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
LCNB $54.60 million 4.00 $12.48 million $1.30 16.77
First Community $38.45 million 3.99 $6.68 million $1.04 21.97

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

Insider and Institutional Ownership

37.2% of LCNB shares are held by institutional investors. Comparatively, 47.9% of First Community shares are held by institutional investors. 4.2% of LCNB shares are held by insiders. Comparatively, 8.7% of First Community shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

LCNB pays an annual dividend of $0.64 per share and has a dividend yield of 2.9%. First Community pays an annual dividend of $0.36 per share and has a dividend yield of 1.6%. LCNB pays out 49.2% of its earnings in the form of a dividend. First Community pays out 34.6% 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.

Profitability

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

Net Margins Return on Equity Return on Assets
LCNB 23.84% 8.88% 0.99%
First Community 17.69% 8.44% 0.78%

Risk and Volatility

LCNB has a beta of 0.41, indicating that its stock price is 59% less volatile than the S&P 500. Comparatively, First Community has a beta of 0.87, indicating that its stock price is 13% less volatile than the S&P 500.

Summary

LCNB beats First Community on 9 of the 16 factors compared between the two stocks.

LCNB Company Profile

LCNB Corp. (LCNB) is a financial holding company. The Company’s subsidiary includes LCNB National Bank (the Bank). The Bank offers commercial and personal banking services. Its services include safe deposit boxes, night depositories, cashier’s checks, utility bill collections, notary public service, mobile banking and other services tailored for both individuals and businesses. Its loan products include commercial and industrial loans, commercial and residential real estate loans, various types of consumer loans and small business administration loans. Its investment portfolio includes securities available-for-sale, such as the United States Treasury notes, the United States Agency notes, Certificates of deposit, and Equity securities. Its deposit services include checking accounts, negotiable order of withdrawal accounts, savings accounts, money market deposit accounts, lifetime checking accounts, individual retirement accounts and certificates of deposit.

First Community Company Profile

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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