Reviewing National Bankshares (NASDAQ:NKSH) & Hingham Institution for Savings (NASDAQ:HIFS)

Hingham Institution for Savings (NASDAQ:HIFS) and National Bankshares (NASDAQ:NKSH) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, analyst recommendations, risk, earnings and profitability.

Volatility and Risk

Hingham Institution for Savings has a beta of 0.83, meaning that its stock price is 17% less volatile than the S&P 500. Comparatively, National Bankshares has a beta of 0.6, meaning that its stock price is 40% less volatile than the S&P 500.

Dividends

Hingham Institution for Savings pays an annual dividend of $2.52 per share and has a dividend yield of 0.8%. National Bankshares pays an annual dividend of $1.50 per share and has a dividend yield of 3.5%. Hingham Institution for Savings pays out 8.4% of its earnings in the form of a dividend. National Bankshares pays out 47.2% 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.

Institutional & Insider Ownership

49.3% of Hingham Institution for Savings shares are owned by institutional investors. Comparatively, 29.7% of National Bankshares shares are owned by institutional investors. 3.3% of National Bankshares shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Hingham Institution for Savings and National Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hingham Institution for Savings	25.94%	8.22%	0.88%
National Bankshares	23.22%	10.66%	1.09%

Analyst Recommendations

This is a summary of recent ratings for Hingham Institution for Savings and National Bankshares, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hingham Institution for Savings	0	0	1	0	3.00
National Bankshares	0	0	1	1	3.50

Valuation and Earnings

This table compares Hingham Institution for Savings and National Bankshares”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hingham Institution for Savings	$236.78 million	2.84	$54.55 million	$30.02	10.28
National Bankshares	$85.32 million	3.19	$15.83 million	$3.18	13.42

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

Summary

National Bankshares beats Hingham Institution for Savings on 8 of the 15 factors compared between the two stocks.

About Hingham Institution for Savings

Hingham Institution for Savings provides various financial products and services to individuals and small businesses in the United States. It offers savings, checking, money market, demand, and negotiable order of withdrawal accounts, as well as certificates of deposit. The company provides commercial and residential real estate, construction, home equity, commercial, consumer, and mortgage loans. In addition, it offers ATMs, debit cards, and Internet-based banking services. The company offers its services through a network of offices in Boston; Washington, D.C.; and San Francisco Bay Area. Hingham Institution for Savings was incorporated in 1834 and is headquartered in Hingham, Massachusetts.

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.