Reviewing LCNB (NASDAQ:LCNB) and First Commonwealth Financial (NYSE:FCF)


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

Dividends

LCNB pays an annual dividend of $0.76 per share and has a dividend yield of 4.3%. First Commonwealth Financial pays an annual dividend of $0.44 per share and has a dividend yield of 2.9%. LCNB pays out 52.1% of its earnings in the form of a dividend. First Commonwealth Financial pays out 40.0% 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. LCNB has increased its dividend for 3 consecutive years and First Commonwealth Financial has increased its dividend for 1 consecutive years. LCNB is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of current recommendations and price targets for LCNB and First Commonwealth Financial, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
LCNB 0 0 1 0 3.00
First Commonwealth Financial 0 5 2 0 2.29

LCNB presently has a consensus price target of $17.50, indicating a potential downside of 1.74%. First Commonwealth Financial has a consensus price target of $11.50, indicating a potential downside of 23.54%. Given LCNB’s stronger consensus rating and higher probable upside, analysts plainly believe LCNB is more favorable than First Commonwealth Financial.

Risk and Volatility

LCNB has a beta of 0.9, meaning that its stock price is 10% less volatile than the S&P 500. Comparatively, First Commonwealth Financial has a beta of 1.13, meaning that its stock price is 13% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
LCNB 22.10% 8.18% 1.14%
First Commonwealth Financial 18.68% 7.42% 0.89%

Earnings and Valuation

This table compares LCNB and First Commonwealth Financial’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
LCNB $77.54 million 2.94 $18.91 million $1.46 12.20
First Commonwealth Financial $410.75 million 3.52 $105.33 million $1.10 13.67

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

Insider and Institutional Ownership

38.6% of LCNB shares are owned by institutional investors. Comparatively, 67.0% of First Commonwealth Financial shares are owned by institutional investors. 6.4% of LCNB shares are owned by insiders. Comparatively, 1.5% of First Commonwealth Financial shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

LCNB beats First Commonwealth Financial on 9 of the 17 factors compared between the two stocks.

About LCNB

LCNB Corp. operates as the financial holding company for LCNB National Bank that provides banking services in Ohio. The company's deposit products include checking accounts, demand deposits, savings accounts, and money market deposits, as well as certificates of deposit. Its loan products comprise commercial and industrial, commercial and residential real estate, agricultural, construction, small business administration, and residential mortgage loans. The company also offers consumer loans, such as automobile, recreational vehicles, boat, home improvement, and personal loans. In addition, it provides trust administration, estate settlement, and fiduciary services; and investment management services for trusts, agency accounts, individual retirement accounts, and foundations/endowments. Further, the company offers investment services and products, including financial needs analysis, mutual funds, securities trading, annuities, and life insurance; and security brokerage services. Additionally, it provides safe deposit boxes, night depositories, cashier's checks, bank-by-mail, ATMs, cash and transaction services, debit cards, wire transfers, electronic funds transfer, utility bill collections, notary public service, cash management services, telephone banking, PC Internet banking, mobile banking, and other services for individuals and businesses. As of December 31, 2020, the company operated 33 offices, including a main office in Warren County; branch offices in Warren, Butler, Clinton, Clermont, Fayette, Franklin, Hamilton, Montgomery, Preble, and Ross counties; and an operations center in Warren County, Ohio, as well as 36 ATMs. LCNB Corp. was founded in 1877 and is headquartered in Lebanon, Ohio.

About First Commonwealth Financial

First Commonwealth Financial Corporation, a financial holding company, provides various consumer and commercial banking services to individuals, and small and mid-sized businesses in the United States. Its consumer services include personal checking accounts, interest-earning checking accounts, savings and health savings accounts, insured money market accounts, debit cards, investment certificates, fixed and variable rate certificates of deposit, mortgage loans, secured and unsecured installment loans, construction and real estate loans, safe deposit facilities, credit cards, credit lines with overdraft checking protection, IRA accounts, and automated teller machine (atm) services, as well as internet, mobile, and telephone banking services. The company's commercial banking services comprise commercial lending, business checking accounts, online account management services, payroll direct deposits, commercial cash management services, and repurchase agreements, as well as ACH origination services. It also offers various trust and asset management services; auto, home, and business insurance, as well as term life insurance; and annuities, mutual funds, and stock and bond brokerage services through a broker-dealer and insurance brokers. As of December 31, 2020, the company operated 120 community banking offices in western and central Pennsylvania, as well as northeastern, central, and southwestern Ohio; corporate banking centers in Pittsburgh, Pennsylvania, as well as Columbus, Canton, and Cleveland, Ohio; mortgage banking offices in Wexford, Pennsylvania, and Hudson, Westlake, as well as Lewis Center, Ohio; and 139 automated teller machines. First Commonwealth Financial Corporation was founded in 1934 and is headquartered in Indiana, Pennsylvania.

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