Head-To-Head Review: South Plains Financial (NASDAQ:SPFI) vs. First Community Bankshares (NASDAQ:FCBC)

South Plains Financial (NASDAQ:SPFI) and First Community Bankshares (NASDAQ:FCBC) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, institutional ownership, dividends, risk, earnings, analyst recommendations and profitability.

Insider & Institutional Ownership

55.0% of South Plains Financial shares are owned by institutional investors. Comparatively, 35.0% of First Community Bankshares shares are owned by institutional investors. 25.4% of South Plains Financial shares are owned by insiders. Comparatively, 3.7% of First Community Bankshares shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings for South Plains Financial and First Community Bankshares, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
South Plains Financial	0	0	3	0	3.00
First Community Bankshares	0	1	0	0	2.00

South Plains Financial currently has a consensus target price of $34.33, indicating a potential upside of 14.10%. First Community Bankshares has a consensus target price of $38.00, indicating a potential downside of 6.33%. Given South Plains Financial’s stronger consensus rating and higher probable upside, analysts clearly believe South Plains Financial is more favorable than First Community Bankshares.

Earnings & Valuation

This table compares South Plains Financial and First Community Bankshares’ top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
South Plains Financial	$291.26 million	1.70	$62.74 million	$3.74	8.05
First Community Bankshares	$174.62 million	4.26	$48.02 million	$2.71	14.97

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

Profitability

This table compares South Plains Financial and First Community Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
South Plains Financial	16.53%	11.58%	1.09%
First Community Bankshares	28.30%	11.33%	1.74%

Dividends

South Plains Financial pays an annual dividend of $0.56 per share and has a dividend yield of 1.9%. First Community Bankshares pays an annual dividend of $1.16 per share and has a dividend yield of 2.9%. South Plains Financial pays out 15.0% of its earnings in the form of a dividend. First Community Bankshares pays out 42.8% 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 Bankshares has raised its dividend for 13 consecutive years. First Community Bankshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

South Plains Financial has a beta of 0.59, meaning that its stock price is 41% less volatile than the S&P 500. Comparatively, First Community Bankshares has a beta of 0.52, meaning that its stock price is 48% less volatile than the S&P 500.

Summary

South Plains Financial beats First Community Bankshares on 11 of the 17 factors compared between the two stocks.

About South Plains Financial

South Plains Financial, Inc. operates as a bank holding company for City Bank that provides commercial and consumer financial services to small and medium-sized businesses and individuals. The company operates through two segments, Banking and Insurance. It offers deposit products, including demand deposit accounts, interest-bearing products, savings accounts, and certificate of deposits. The company also provides commercial real estate loans; general and specialized commercial loans, including agricultural production and real estate, energy, finance, investment, and insurance loans, as well as loans to goods, services, restaurant and retail, construction, and other industries; residential construction loans; and 1-4 family residential loans, auto loans, and other loans for recreational vehicles or other purposes. In addition, it offers crop insurance products; trust products and services; investment services; mortgage banking services; online and mobile banking services; and debit and credit cards. The company was founded in 1941 and is headquartered in Lubbock, Texas.

About First Community Bankshares

First Community Bankshares, Inc. operates as the financial holding company for First Community Bank that provides various banking products and services. It offers demand deposit accounts, savings and money market accounts, certificates of deposit, and individual retirement plans; and commercial, consumer real estate, and consumer and other loans. The company also provides trust management, estate administration, and investment advisory services; and investment management services. It serves individuals and businesses across various industries, such as education, government, and health services; coal mining and gas extraction; retail trade; construction; manufacturing; tourism; and transportation. The company operates through branches in West Virginia, Virginia, North Carolina, and Tennessee. Community Bankshares, Inc. was founded in 1874 and is headquartered in Bluefield, Virginia.