Critical Review: First Bancorp (NASDAQ:FBNC) versus Colony Bankcorp (NYSE:CBAN)

Colony Bankcorp (NYSE:CBAN) and First Bancorp (NASDAQ:FBNC) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, risk, earnings, institutional ownership, analyst recommendations, profitability and dividends.

Risk and Volatility

Colony Bankcorp has a beta of 0.56, suggesting that its stock price is 44% less volatile than the S&P 500. Comparatively, First Bancorp has a beta of 0.82, suggesting that its stock price is 18% less volatile than the S&P 500.

Dividends

Colony Bankcorp pays an annual dividend of $0.48 per share and has a dividend yield of 2.4%. First Bancorp pays an annual dividend of $0.96 per share and has a dividend yield of 1.6%. Colony Bankcorp pays out 30.0% of its earnings in the form of a dividend. First Bancorp pays out 32.8% 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. Colony Bankcorp has increased its dividend for 7 consecutive years. Colony Bankcorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Colony Bankcorp and First Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Colony Bankcorp	14.83%	10.23%	1.01%
First Bancorp	20.59%	10.86%	1.38%

Earnings & Valuation

This table compares Colony Bankcorp and First Bancorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Colony Bankcorp	$190.23 million	2.20	$28.25 million	$1.60	12.37
First Bancorp	$549.30 million	4.46	$111.05 million	$2.93	20.21

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

Analyst Ratings

This is a summary of current recommendations and price targets for Colony Bankcorp and First Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Colony Bankcorp	0	0	3	1	3.25
First Bancorp	0	2	3	1	2.83

Colony Bankcorp currently has a consensus target price of $23.00, suggesting a potential upside of 16.22%. First Bancorp has a consensus target price of $62.25, suggesting a potential upside of 5.13%. Given Colony Bankcorp’s stronger consensus rating and higher probable upside, equities analysts plainly believe Colony Bankcorp is more favorable than First Bancorp.

Institutional and Insider Ownership

50.4% of Colony Bankcorp shares are held by institutional investors. Comparatively, 68.4% of First Bancorp shares are held by institutional investors. 3.9% of Colony Bankcorp shares are held by insiders. Comparatively, 2.0% of First Bancorp shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

First Bancorp beats Colony Bankcorp on 10 of the 16 factors compared between the two stocks.

About Colony Bankcorp

Colony Bankcorp, Inc. operates as the bank holding company for Colony Bank that provides various banking products and services to commercial and consumer customers. The company offers various deposit products, including demand, savings, and time deposits. It also provides loans to small and medium-sized businesses; residential and commercial construction, and land development loans; commercial real estate loans; commercial loans; agri-business and production loans; residential mortgage loans; home equity loans; and consumer loans. In addition, the company offers internet banking services, electronic bill payment services, safe deposit box rentals, telephone banking, credit and debit card services, and remote depository products, as well as access to a network of ATMs. As of January 20, 2022, it operated 39 locations throughout Georgia. The company was founded in 1975 and is headquartered in Fitzgerald, Georgia.

About First Bancorp

First Bancorp operates as the bank holding company for First Bank that provides banking products and services for individuals and small to medium-sized businesses. The company accepts deposit products, such as checking, savings, and money market accounts, as well as time deposits, including certificate of deposits and individual retirement accounts. It also offers loans for a range of consumer and commercial purposes comprising loans for business, real estate, personal, home improvement, and automobiles, as well as residential mortgages and small business administration loans; and accounts receivable financing and factoring, inventory financing, and purchase order financing services. In addition, the company provides credit and debit cards, letter of credits, and safe deposit box rental services, as well as electronic funds transfer services consisting of wire transfers; and internet and mobile banking, cash management, bank-by-phone services, and remote deposit capture services. Further, it offers investment and insurance products, such as mutual funds, annuities, long-term care insurance, life insurance, and company retirement plans, as well as property and casualty insurance products; and financial planning services. The company was founded in 1934 and is headquartered in Southern Pines, North Carolina.