First Community (NASDAQ:FCCO) and Allegiance Bancshares (NASDAQ:ABTX) Critical Contrast

First Community (NASDAQ:FCCOGet Rating) and Allegiance Bancshares (NASDAQ:ABTXGet Rating) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, dividends, risk, profitability, earnings and institutional ownership.

Institutional and Insider Ownership

56.7% of First Community shares are owned by institutional investors. Comparatively, 54.6% of Allegiance Bancshares shares are owned by institutional investors. 4.0% of First Community shares are owned by insiders. Comparatively, 5.8% of Allegiance Bancshares shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
First Community 25.54% 11.56% 0.99%
Allegiance Bancshares 31.43% 10.42% 1.19%

Earnings & Valuation

This table compares First Community and Allegiance Bancshares’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First Community $61.42 million 2.32 $15.47 million $2.08 9.07
Allegiance Bancshares $261.75 million 3.04 $81.55 million $4.02 9.71

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

Dividends

First Community pays an annual dividend of $0.52 per share and has a dividend yield of 2.8%. Allegiance Bancshares pays an annual dividend of $0.56 per share and has a dividend yield of 1.4%. First Community pays out 25.0% of its earnings in the form of a dividend. Allegiance Bancshares pays out 13.9% 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 Community has raised its dividend for 1 consecutive years and Allegiance Bancshares has raised its dividend for 2 consecutive years.

Risk and Volatility

First Community has a beta of 0.66, indicating that its stock price is 34% less volatile than the S&P 500. Comparatively, Allegiance Bancshares has a beta of 0.92, indicating that its stock price is 8% less volatile than the S&P 500.

Analyst Recommendations

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

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

First Community presently has a consensus target price of $23.00, suggesting a potential upside of 21.95%. Given First Community’s higher probable upside, equities research analysts clearly believe First Community is more favorable than Allegiance Bancshares.

Summary

Allegiance Bancshares beats First Community on 11 of the 15 factors compared between the two stocks.

About First Community (Get Rating)

First Community Corporation operates as the bank holding company for First Community Bank which offers various commercial and retail banking products and services to small-to-medium sized businesses, professional concerns, and individuals. The company operates through Commercial and Retail Banking, Mortgage Banking, and Investment Advisory and Non-Deposit segments. Its deposit products include checking, NOW, savings, and individual retirement accounts; and demand deposits, as well as other time deposits, such as daily money market accounts and longer-term certificates of deposit. The company's loan portfolio comprises commercial loans that consist of secured and unsecured loans for working capital, business expansion, and the purchase of equipment and machinery; consumer loans, including secured and unsecured loans for financing automobiles, home improvements, education, and personal investments; real estate construction and acquisition loans; and fixed and variable rate mortgage loans. It also provides other banking services, which include online banking, internet banking, cash management, safe deposit boxes, travelers checks, direct deposit of payroll and social security checks, and automatic drafts for various accounts. In addition, the company offers non-deposit investment products and other investment brokerage services; VISA and MasterCard credit card services; investment advisory services; and insurance services. It operates 21 full-service offices located in the Lexington County, Richland County, Newberry County, Kershaw County, Greenville County, Anderson County, Pickens County, and Aiken County, South Carolina; and Richmond County and Columbia County, Georgia. The company was incorporated in 1994 and is headquartered in Lexington, South Carolina.

About Allegiance Bancshares (Get Rating)

Allegiance Bancshares, Inc. operates as the bank holding company for Allegiance Bank that provides a range of commercial banking services primarily to small and medium-sized businesses, professionals, and individual customers. It accepts deposit products, including checking accounts, commercial accounts, money market accounts, savings accounts, and other time deposits; and certificates of deposit. The company's loan portfolio comprises commercial and industrial loans; commercial real estate loans, including multi-family residential loans; commercial real estate construction and land development loans; residential real estate loans, such as 1-4 family residential mortgage loans; residential construction loans; and consumer and other loans. In addition, it offers automated teller machine services, drive-through services, and depository facilities; mobile banking services; and telephone, mail, and Internet banking services. Further, the company provides safe deposit boxes, debit cards, cash management and wire transfer services, night depository services, direct deposits, cashier's checks, and letters of credit. As of December 31, 2021, it operated 27 full-service banking locations, including 26 bank offices in the Houston metropolitan area and one office in Beaumont. The company was founded in 2007 and is headquartered in Houston, Texas.

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