Financial Survey: Fidelity Southern (LION) & First Community Bankshares (NASDAQ:FCBC)

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

Analyst Recommendations

This is a summary of recent ratings and recommmendations for First Community Bankshares and Fidelity Southern, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Community Bankshares 0 0 0 0 N/A
Fidelity Southern 0 0 2 0 3.00

Fidelity Southern has a consensus price target of $28.50, indicating a potential downside of 1.42%. Given Fidelity Southern’s higher possible upside, analysts plainly believe Fidelity Southern is more favorable than First Community Bankshares.

Institutional and Insider Ownership

43.2% of First Community Bankshares shares are held by institutional investors. Comparatively, 69.3% of Fidelity Southern shares are held by institutional investors. 3.4% of First Community Bankshares shares are held by company insiders. Comparatively, 20.2% of Fidelity Southern shares are held by company 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.

Valuation and Earnings

This table compares First Community Bankshares and Fidelity Southern’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First Community Bankshares $124.74 million 4.39 $36.34 million N/A N/A
Fidelity Southern $320.30 million 2.49 $43.82 million $1.61 17.96

Fidelity Southern has higher revenue and earnings than First Community Bankshares.

Risk & Volatility

First Community Bankshares has a beta of 0.66, meaning that its stock price is 34% less volatile than the S&P 500. Comparatively, Fidelity Southern has a beta of 0.66, meaning that its stock price is 34% less volatile than the S&P 500.

Dividends

First Community Bankshares pays an annual dividend of $0.84 per share and has a dividend yield of 2.4%. Fidelity Southern pays an annual dividend of $0.48 per share and has a dividend yield of 1.7%. Fidelity Southern pays out 29.8% of its earnings in the form of a dividend. First Community Bankshares has raised its dividend for 7 consecutive years. First Community Bankshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

Net Margins Return on Equity Return on Assets
First Community Bankshares 29.57% 11.07% 1.63%
Fidelity Southern 12.21% 8.68% 0.79%

First Community Bankshares Company Profile

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 arrangements; commercial, consumer, and real estate mortgage loans, as well as lines of credit; various credit and debit cards, and automated teller machine card services; and corporate and personal trust services. The company also provides wealth management services, including 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. As of December 31, 2018, the company operated 44 branches, including 19 branches in Virginia, 18 branches in West Virginia, 5 branches in North Carolina, and 2 branches in Tennessee. First Community Bankshares, Inc. was founded in 1874 and is headquartered in Bluefield, Virginia.

Fidelity Southern Company Profile

Fidelity Southern Corporation operates as the bank holding company for Fidelity Bank that provides financial products and services primarily to individuals and small to medium-sized businesses in the United States. The company accepts noninterest-bearing and interest-bearing demand accounts, including money market accounts and savings deposits; and time deposits. It also offers commercial and industrial loans, commercial real estate loans, small business administration loans, indirect automobile loans, and real estate construction loans, as well as consumer loans, including automobile loans, residential mortgage and home equity loans, and secured and unsecured personal loans. In addition, the company provides Internet banking services comprising online bill pay and mobile deposit, and Internet cash management services; and wealth management services, such as trust administration, investment management, financial and estate planning, and specialized lending and banking. Further, it offers cash management, remote deposit, and international trade services; and merchant services and credit cards. Additionally, the company operates an insurance agency that offers consumer credit related insurance products; and issues trust preferred securities. As of December 31, 2018, it owned 59 and leased 10 retail bank branches; and leased 33 mortgage loan production offices. Fidelity Southern Corporation was founded in 1973 and is headquartered in Atlanta, Georgia.

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