First Capital (NASDAQ:FCAP) versus Wells Fargo & Company (NYSE:WFC) Financial Analysis

Wells Fargo & Company (NYSE:WFC) and First Capital (NASDAQ:FCAP) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their valuation, profitability, dividends, analyst recommendations, institutional ownership, earnings and risk.

Profitability

This table compares Wells Fargo & Company and First Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Wells Fargo & Company	17.55%	13.85%	1.06%
First Capital	26.79%	13.39%	1.45%

Earnings & Valuation

This table compares Wells Fargo & Company and First Capital”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Wells Fargo & Company	$87.05 billion	3.12	$21.34 billion	$6.88	13.05
First Capital	$54.51 million	3.83	$16.37 million	$5.53	11.30

Wells Fargo & Company has higher revenue and earnings than First Capital. First Capital is trading at a lower price-to-earnings ratio than Wells Fargo & Company, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

75.9% of Wells Fargo & Company shares are owned by institutional investors. Comparatively, 11.6% of First Capital shares are owned by institutional investors. 0.1% of Wells Fargo & Company shares are owned by company insiders. Comparatively, 4.1% of First Capital shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility and Risk

Wells Fargo & Company has a beta of 0.92, suggesting that its share price is 8% less volatile than the S&P 500. Comparatively, First Capital has a beta of 0.71, suggesting that its share price is 29% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings for Wells Fargo & Company and First Capital, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Wells Fargo & Company	0	10	14	2	2.69
First Capital	0	0	2	0	3.00

Wells Fargo & Company presently has a consensus price target of $98.61, indicating a potential upside of 9.85%. Given Wells Fargo & Company’s higher probable upside, equities analysts plainly believe Wells Fargo & Company is more favorable than First Capital.

Dividends

Wells Fargo & Company pays an annual dividend of $2.00 per share and has a dividend yield of 2.2%. First Capital pays an annual dividend of $1.28 per share and has a dividend yield of 2.0%. Wells Fargo & Company pays out 29.1% of its earnings in the form of a dividend. First Capital pays out 23.1% 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. Wells Fargo & Company has raised its dividend for 4 consecutive years and First Capital has raised its dividend for 2 consecutive years. Wells Fargo & Company is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Wells Fargo & Company beats First Capital on 12 of the 18 factors compared between the two stocks.

About Wells Fargo & Company

Wells Fargo & Co. is a diversified and community-based financial services company, which engages in the provision of banking, insurance, investments, mortgage, and consumer and commercial finance products and services. It operates through the following segments: Consumer Banking and Lending, Commercial Banking, Corporate and Investment Banking, and Wealth and Investment Management. The Consumer Banking and Lending segment offers consumer and small business banking, home lending, credit cards, auto, and personal lending. The Commercial Banking segment provides banking and credit products across industry sectors and municipalities, secured lending and lease products, and treasury management. The Corporate and Investment Banking segment is composed of corporate banking, investment banking, treasury management, commercial real estate lending and servicing, and equity and fixed income solutions, as well as sales, trading, and research capabilities. The Wealth and Investment Management segment refers to personalized wealth management, brokerage, financial planning, lending, private banking, trust, and fiduciary products and services. The company was founded by Henry Wells and William G. Fargo on March 18, 1852 and is headquartered in San Francisco, CA.

About First Capital

First Capital, Inc. operates as the bank holding company for First Harrison Bank that provides various banking services to individuals and business customers. The company offers various deposit instruments, including non-interest-bearing checking accounts, negotiable order of withdrawal accounts, money market accounts, regular savings accounts, certificates of deposit, and retirement savings plans. It also provides residential mortgage loans, construction loans for residential and commercial properties, and commercial real estate loans, as well as commercial business loans. In addition, the company originates mortgage loans for sale in the secondary market and sells non-deposit investment products; and offers various secured or guaranteed consumer loans comprising automobile and truck loans, home equity loans, home improvement loans, boat loans, mobile home loans, credit cards and other personal loans, and loans secured by savings deposits, as well as unsecured consumer loans. First Capital, Inc. was founded in 1891 and is based in Corydon, Indiana.