Reviewing Enterprise Bancorp (EBTC) & First Community Bancshares (FCBC)

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Enterprise Bancorp (NASDAQ: FCBC) and First Community Bancshares (NASDAQ:FCBC) are both small-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, earnings, profitability, institutional ownership, risk, valuation and analyst recommendations.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Enterprise Bancorp and First Community Bancshares, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Enterprise Bancorp 0 0 0 0 N/A
First Community Bancshares 0 1 0 0 2.00

First Community Bancshares has a consensus target price of $30.00, indicating a potential downside of 10.63%. Given First Community Bancshares’ higher probable upside, analysts clearly believe First Community Bancshares is more favorable than Enterprise Bancorp.

Profitability

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

Net Margins Return on Equity Return on Assets
Enterprise Bancorp 17.47% 11.76% 0.97%
First Community Bancshares 21.33% 9.65% 1.40%

Insider & Institutional Ownership

21.3% of Enterprise Bancorp shares are held by institutional investors. Comparatively, 42.4% of First Community Bancshares shares are held by institutional investors. 19.0% of Enterprise Bancorp shares are held by insiders. Comparatively, 3.4% of First Community Bancshares shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Enterprise Bancorp and First Community Bancshares’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Enterprise Bancorp $120.71 million 3.25 $19.39 million N/A N/A
First Community Bancshares $121.56 million 4.58 $21.48 million N/A N/A

First Community Bancshares has higher revenue and earnings than Enterprise Bancorp.

Risk & Volatility

Enterprise Bancorp has a beta of 0.73, meaning that its stock price is 27% less volatile than the S&P 500. Comparatively, First Community Bancshares has a beta of 0.63, meaning that its stock price is 37% less volatile than the S&P 500.

Dividends

Enterprise Bancorp pays an annual dividend of $0.58 per share and has a dividend yield of 1.7%. First Community Bancshares pays an annual dividend of $0.84 per share and has a dividend yield of 2.5%. Enterprise Bancorp has raised its dividend for 5 consecutive years and First Community Bancshares has raised its dividend for 6 consecutive years. First Community Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

First Community Bancshares beats Enterprise Bancorp on 10 of the 13 factors compared between the two stocks.

About Enterprise Bancorp

Enterprise Bancorp, Inc. operates as the holding company for Enterprise Bank and Trust Company that provides various banking products and services primarily in the greater Merrimack Valley and North Central regions of Massachusetts and Southern New Hampshire. The company offers commercial checking, business and municipal savings accounts, term certificates of deposit, money market and business sweep accounts, interest on lawyers trust accounts, escrow management accounts, personal checking accounts, savings accounts, and individual retirement accounts, as well as checking and simplified employee pension accounts. It also provides commercial mortgage loans, construction and land development loans, secured and unsecured commercial loans and lines of credit, and letters of credit; and conventional residential mortgage loans, home equity loans and lines, residential construction loans on primary and secondary residences, and secured and unsecured personal loans and lines of credit, as well as equipment lease financing services. In addition, the company offers cash management services; various investment advisory and management services, including customized investment management and trust services to individuals, family groups, commercial businesses, trusts, foundations, non-profit organizations, and endowments; and insurance products, such as property and casualty, employee benefits, and risk-management solutions. As of January 25, 2018, it had 24 full-service branches located in the Massachusetts communities of Lowell, Acton, Andover, Billerica, Chelmsford, Dracut, Fitchburg, Lawrence, Leominster, Methuen, Tewksbury, Tyngsborough, and Westford; and the New Hampshire communities of Derry, Hudson, Nashua, Pelham, Salem, and Windham. The company primarily serves business entities, non-profit organizations, professionals, and individuals. Enterprise Bancorp, Inc. was founded in 1989 and is headquartered in Lowell, Massachusetts.

About First Community Bancshares

First Community Bancshares, Inc. operates as the holding company for First Community Bank that provides various commercial banking products and services. It offers demand deposit accounts, savings and money market accounts, certificates of deposit, and individual retirement arrangements; commercial, consumer, and real estate mortgage loans, as well as lines of credit; various credit and debit cards, and automated teller machine card services; and corporate and personal trust services. The company also provides wealth management services, including trust management, estate administration, and investment advisory services; investment management services; and life, health, and property and casualty insurance products. 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. As of December 31, 2017, the company operated 44 branches, including 18 branches in West Virginia, 19 branches in Virginia, 5 branches in North Carolina, and 2 branches in Tennessee. First Community Bancshares, Inc. was founded in 1874 and is headquartered in Bluefield, Virginia.

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