Analyzing Peoples Financial (OTCMKTS:PFBX) & First Community Bancshares (NASDAQ:FCBC)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
First Community Bancshares	25.89%	10.44%	1.60%
Peoples Financial	11.31%	4.06%	0.53%

Analyst Recommendations

This is a summary of recent ratings and price targets for First Community Bancshares and Peoples Financial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Community Bancshares	0	0	1	0	3.00
Peoples Financial	0	0	0	0	0.00

Dividends

First Community Bancshares pays an annual dividend of $1.24 per share and has a dividend yield of 2.9%. Peoples Financial pays an annual dividend of $0.36 per share and has a dividend yield of 1.7%. First Community Bancshares pays out 46.8% of its earnings in the form of a dividend. Peoples Financial pays out 40.9% 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 Bancshares has increased its dividend for 13 consecutive years. First Community Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

First Community Bancshares has a beta of 0.48, indicating that its share price is 52% less volatile than the S&P 500. Comparatively, Peoples Financial has a beta of 0.21, indicating that its share price is 79% less volatile than the S&P 500.

Earnings and Valuation

This table compares First Community Bancshares and Peoples Financial”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Community Bancshares	$185.42 million	4.31	$48.79 million	$2.65	15.98
Peoples Financial	$35.66 million	2.75	$3.91 million	$0.88	24.15

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

Institutional & Insider Ownership

35.0% of First Community Bancshares shares are held by institutional investors. Comparatively, 32.8% of Peoples Financial shares are held by institutional investors. 3.7% of First Community Bancshares shares are held by insiders. Comparatively, 28.1% of Peoples Financial shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

First Community Bancshares beats Peoples Financial on 13 of the 16 factors compared between the two stocks.

About First Community Bancshares

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.

About Peoples Financial

Peoples Financial Corporation operates as the bank holding company for The Peoples Bank that provides banking, financial, and trust services to government entities, individuals, and small and commercial businesses in Mississippi. The company accepts various deposits, such as interest and non-interest-bearing checking accounts, savings accounts, certificates of deposit, and individual retirement accounts (IRAs). It offers business, commercial, real estate, construction, personal, and installment loans; and personal trust, agencies, and estate services, including living and testamentary trusts, executorships, guardianships, and conservatorships. In addition, the company provides self-directed IRAs; and escrow management, stock transfer, and bond paying agency accounts to corporate customers. Further, it offers other services consisting of safe deposit box rental, wire transfer, night drop facilities, collection, cash management, and Internet banking services. the company provides services to customers of various industries, such as seafood, retail, hospitality, hotel/motel, gaming, and construction. Peoples Financial Corporation was founded in 1896 and is headquartered in Biloxi, Mississippi.