Contrasting Emclaire Financial (NASDAQ:EMCF) & First Bancshares (NASDAQ:FBMS)

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

Insider and Institutional Ownership

55.6% of First Bancshares shares are held by institutional investors. Comparatively, 6.2% of Emclaire Financial shares are held by institutional investors. 4.3% of First Bancshares shares are held by company insiders. Comparatively, 17.8% of Emclaire Financial shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Earnings & Valuation

This table compares First Bancshares and Emclaire Financial’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First Bancshares $175.48 million 2.43 $43.74 million $2.79 7.14
Emclaire Financial $40.54 million 1.38 $7.95 million N/A N/A

First Bancshares has higher revenue and earnings than Emclaire Financial.

Profitability

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

Net Margins Return on Equity Return on Assets
First Bancshares 24.46% 8.80% 1.21%
Emclaire Financial 15.24% 7.56% 0.67%

Dividends

First Bancshares pays an annual dividend of $0.40 per share and has a dividend yield of 2.0%. Emclaire Financial pays an annual dividend of $1.20 per share and has a dividend yield of 5.8%. First Bancshares pays out 14.3% of its earnings in the form of a dividend. First Bancshares has increased its dividend for 2 consecutive years and Emclaire Financial has increased its dividend for 4 consecutive years. Emclaire Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

First Bancshares has a beta of 0.89, indicating that its stock price is 11% less volatile than the S&P 500. Comparatively, Emclaire Financial has a beta of 0.53, indicating that its stock price is 47% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for First Bancshares and Emclaire Financial, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Bancshares 0 0 2 0 3.00
Emclaire Financial 0 0 0 0 N/A

First Bancshares presently has a consensus price target of $36.00, suggesting a potential upside of 80.81%. Given First Bancshares’ higher possible upside, equities research analysts clearly believe First Bancshares is more favorable than Emclaire Financial.

Summary

First Bancshares beats Emclaire Financial on 10 of the 15 factors compared between the two stocks.

First Bancshares Company Profile

The First Bancshares, Inc. operates as the bank 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, automated teller machines, voice response telephone inquiry services, commercial sweep accounts, cash management services, safe deposit boxes, merchant, mobile deposit, direct deposit of payroll and social security checks, automatic drafts for various accounts, 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, 2018, the company operated through a network of 61 full-service branches, 1 motor branch, and 4 loan production offices in Mississippi, Alabama, Louisiana, Florida, and Georgia. The First Bancshares, Inc. was incorporated in 1995 and is headquartered in Hattiesburg, Mississippi.

Emclaire Financial Company Profile

Emclaire Financial Corp operates as the bank holding company for The Farmers National Bank of Emlenton that provides retail and commercial financial products and services to individuals and businesses in western Pennsylvania. The company's deposit products include checking, savings, and term certificate accounts; time deposits; noninterest bearing and interest bearing demand deposit accounts; and money market accounts. Its loan portfolio comprises one-to-four family mortgage loans, residential and commercial mortgages loans, home equity loans, and commercial business and commercial real estate loans; and consumer loans, such as loans for automobile purchases, home improvements not secured by real estate, capital, and other personal expenditures, as well as unsecured revolving personal lines of credit and overdraft protection. The company, through its subsidiary, Emclaire Settlement Services, LLC, also provides real estate settlement services. As of February 20, 2019, it operated 20 full service offices in Venango, Allegheny, Butler, Clarion, Clearfield, Crawford, Elk, Jefferson, and Mercer counties in Pennsylvania, as well as in Hancock County, West Virginia. The company was founded in 1900 and is headquartered in Emlenton, Pennsylvania.

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