Financial Analysis: Simmons First National (NASDAQ:SFNC) vs. First Community Bancshares (NASDAQ:FCBC)

Simmons First National (NASDAQ:SFNC) and First Community Bancshares (NASDAQ:FCBC) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, valuation, earnings, profitability, analyst recommendations, dividends and risk.

Risk and Volatility

Simmons First National has a beta of 0.91, indicating that its share price is 9% less volatile than the S&P 500. Comparatively, First Community Bancshares has a beta of 0.56, indicating that its share price is 44% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Simmons First National and First Community Bancshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Simmons First National	1	3	2	3	2.78
First Community Bancshares	0	1	0	0	2.00

Simmons First National presently has a consensus target price of $22.43, suggesting a potential upside of 15.37%. Given Simmons First National’s stronger consensus rating and higher probable upside, equities analysts clearly believe Simmons First National is more favorable than First Community Bancshares.

Valuation and Earnings

This table compares Simmons First National and First Community Bancshares”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Simmons First National	$1.43 billion	1.97	-$397.55 million	($2.77)	-7.02
First Community Bancshares	$185.42 million	3.91	$48.79 million	$2.66	14.88

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

Profitability

This table compares Simmons First National and First Community Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Simmons First National	-27.83%	6.73%	0.91%
First Community Bancshares	26.32%	10.16%	1.60%

Dividends

Simmons First National pays an annual dividend of $0.85 per share and has a dividend yield of 4.4%. First Community Bancshares pays an annual dividend of $1.24 per share and has a dividend yield of 3.1%. Simmons First National pays out -30.7% of its earnings in the form of a dividend. First Community Bancshares pays out 46.6% 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. Simmons First National has raised its dividend for 14 consecutive years and First Community Bancshares has raised its dividend for 13 consecutive years. Simmons First National is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

27.6% of Simmons First National shares are owned by institutional investors. Comparatively, 35.0% of First Community Bancshares shares are owned by institutional investors. 1.9% of Simmons First National shares are owned by company insiders. Comparatively, 3.7% of First Community Bancshares shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

About Simmons First National

Simmons First National Corporation operates as the holding company for Simmons Bank that provides banking and other financial products and services to individuals and businesses. The company offers checking, savings, and time deposits; consumer, real estate, and commercial loans; agricultural finance, equipment, and small business administration lending; trust and fiduciary services; credit cards; investment management products; treasury management; insurance products; and securities and investment services. It also provides ATM services; Internet and mobile banking platforms; overdraft facilities; and safe deposit boxes. The company was founded in 1903 and is headquartered in Pine Bluff, Arkansas.

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.