Comparing National Bankshares (NASDAQ:NKSH) and Beacon Financial (NYSE:BBT)

Beacon Financial (NYSE:BBT) and National Bankshares (NASDAQ:NKSH) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, earnings, analyst recommendations, institutional ownership, profitability, valuation and risk.

Volatility & Risk

Beacon Financial has a beta of 0.56, meaning that its share price is 44% less volatile than the S&P 500. Comparatively, National Bankshares has a beta of 0.6, meaning that its share price is 40% less volatile than the S&P 500.

Valuation and Earnings

This table compares Beacon Financial and National Bankshares”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Beacon Financial	$800.81 million	3.29	$90.27 million	$1.32	23.80
National Bankshares	$85.32 million	3.20	$15.83 million	$3.18	13.47

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

Institutional and Insider Ownership

83.1% of Beacon Financial shares are held by institutional investors. Comparatively, 29.7% of National Bankshares shares are held by institutional investors. 1.1% of Beacon Financial shares are held by insiders. Comparatively, 3.3% of National Bankshares shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Beacon Financial and National Bankshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Beacon Financial	0	4	3	0	2.43
National Bankshares	0	0	1	1	3.50

Beacon Financial currently has a consensus target price of $32.50, indicating a potential upside of 3.45%. Given Beacon Financial’s higher probable upside, research analysts plainly believe Beacon Financial is more favorable than National Bankshares.

Dividends

Beacon Financial pays an annual dividend of $1.29 per share and has a dividend yield of 4.1%. National Bankshares pays an annual dividend of $1.50 per share and has a dividend yield of 3.5%. Beacon Financial pays out 97.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. National Bankshares pays out 47.2% of its earnings in the form of a dividend.

Profitability

This table compares Beacon Financial and National Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Beacon Financial	8.96%	9.15%	1.01%
National Bankshares	23.22%	10.66%	1.09%

Summary

National Bankshares beats Beacon Financial on 9 of the 17 factors compared between the two stocks.

About Beacon Financial

Truist Financial Corp. operates as a financial holding company, which engages in the provision of banking services to individuals, businesses and municipalities. The firm offers a variety of loans and lease financing to individuals and entities, including insurance premium financing, permanent commercial real estate financing arrangements, loan servicing for third-party investors, direct consumer finance loans to individuals, credit card lending, automobile financing and equipment financing. It also markets a range of other services, including deposits, life insurance, property and casualty insurance, health Truist Financial Corp. operates as a financial holding company. It engages in the provision of banking services to individuals, businesses and municipalities. The company operates through the following segments: Consumer Banking and Wealth; Corporate and Commercial Banking; and Insurance Holdings. The firm offers a variety of loans and lease financing to individuals and entities, including insurance premium financing, permanent commercial real estate financing arrangements, loan servicing for third-party investors, direct consumer finance loans to individuals, credit card lending, automobile financing and equipment financing. It also markets a range of other services, including deposits, life insurance, property and casualty insurance, health insurance and commercial general liability insurance on an agency basis and through a wholesale insurance brokerage operation, merchant services, trust and retirement services, comprehensive wealth advisory services, asset management and capital markets services. The company was founded on December 6, 2019 and is headquartered in Charlotte, NC. insurance and commercial general liability insurance on an agency basis and through a wholesale insurance brokerage operation, merchant services, trust and retirement services, comprehensive wealth advisory services, asset management and capital markets services. The company was founded on December 6, 2019 and is headquartered in Charlotte, NC.

About National Bankshares

National Bankshares, Inc. operates as the bank holding company for the National Bank of Blacksburg that provides retail and commercial banking products and services to individuals, businesses, non-profits, and local governments. The company accepts interest-bearing and non-interest-bearing demand deposit accounts, money market deposit accounts, savings accounts, certificates of deposit, health savings accounts, and individual retirement accounts. Its loan products include commercial and agricultural, commercial real estate, residential real estate, home equity, and various consumer loan products, as well as loans for the construction of commercial and residential properties. The company also provides business and consumer debit and credit cards; letters of credit, night depository services, safe deposit boxes, utility payment services, and automatic funds transfer; wealth management, trust, and estate services; non-deposit investment and insurance products; and telephone, mobile, and Internet banking services. The company was founded in 1891 and is headquartered in Blacksburg, Virginia.