Northeast Bancorp (NASDAQ:NBN) and First National (NASDAQ:FXNC) Financial Survey

First National (NASDAQ:FXNC) and Northeast Bancorp (NASDAQ:NBN) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, profitability, risk, analyst recommendations, dividends, institutional ownership and valuation.

Dividends

First National pays an annual dividend of $0.68 per share and has a dividend yield of 2.2%. Northeast Bancorp pays an annual dividend of $0.04 per share and has a dividend yield of 0.0%. First National pays out 26.8% of its earnings in the form of a dividend. Northeast Bancorp pays out 0.3% 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. First National has raised its dividend for 10 consecutive years. First National is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
First National	19.35%	12.21%	1.12%
Northeast Bancorp	28.34%	20.02%	2.25%

Risk and Volatility

First National has a beta of 0.49, indicating that its stock price is 51% less volatile than the S&P 500. Comparatively, Northeast Bancorp has a beta of 0.64, indicating that its stock price is 36% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and recommmendations for First National and Northeast Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First National	0	1	1	1	3.00
Northeast Bancorp	0	1	2	0	2.67

Northeast Bancorp has a consensus target price of $143.50, suggesting a potential upside of 11.83%. Given Northeast Bancorp’s higher possible upside, analysts plainly believe Northeast Bancorp is more favorable than First National.

Institutional & Insider Ownership

33.9% of First National shares are owned by institutional investors. 14.2% of First National shares are owned by company insiders. Comparatively, 14.2% of Northeast Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First National	$93.26 million	2.94	$17.70 million	$2.54	11.93
Northeast Bancorp	$385.07 million	2.74	$107.48 million	$13.47	9.53

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

Summary

Northeast Bancorp beats First National on 11 of the 18 factors compared between the two stocks.

About First National

First National Corporation is a bank holding company headquartered in Strasburg, Virginia. It operates First Bank, a community bank that provides personal and business banking services. Its offerings include checking and savings accounts, loans, mortgage lending, digital banking and services for businesses, such as cash management. The company serves communities in Virginia and North Carolina through its banking operations. First National traces its roots to 1907 and expanded its reach through the 2024 combination with Touchstone Bankshares, the parent company of Touchstone Bank.

About Northeast Bancorp

Northeast Bancorp is a bank holding company headquartered in Lewiston, Maine. Through its subsidiary, Northeast Bank, it provides banking services to businesses and individuals, including deposit accounts, commercial and consumer loans, residential mortgage lending, and cash management services. The bank serves customers through branches in Maine and also operates a commercial lending business that works with borrowers beyond the state. Its lending activities include financing for businesses and commercial real estate, while its banking services include digital and online banking options.