Critical Review: First BanCorp. (NYSE:FBP) & Bank of the James Financial Group (NASDAQ:BOTJ)

First BanCorp. (NYSE:FBP) and Bank of the James Financial Group (NASDAQ:BOTJ) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, dividends, risk, earnings, profitability and valuation.

Dividends

First BanCorp. pays an annual dividend of $0.56 per share. Bank of the James Financial Group pays an annual dividend of $0.32 per share and has a dividend yield of 3.0%. First BanCorp. pays out 35.4% of its earnings in the form of a dividend. Bank of the James Financial Group pays out 16.3% 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 BanCorp. has raised its dividend for 3 consecutive years and Bank of the James Financial Group has raised its dividend for 3 consecutive years. Bank of the James Financial Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

First BanCorp. has a beta of 1.14, suggesting that its share price is 14% more volatile than the S&P 500. Comparatively, Bank of the James Financial Group has a beta of 0.74, suggesting that its share price is 26% less volatile than the S&P 500.

Valuation & Earnings

This table compares First BanCorp. and Bank of the James Financial Group’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First BanCorp.	$918.39 million	0.00	$305.07 million	$1.58	N/A
Bank of the James Financial Group	$45.10 million	1.09	$8.96 million	$1.96	5.48

First BanCorp. has higher revenue and earnings than Bank of the James Financial Group. First BanCorp. is trading at a lower price-to-earnings ratio than Bank of the James Financial Group, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares First BanCorp. and Bank of the James Financial Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First BanCorp.	27.51%	21.15%	1.52%
Bank of the James Financial Group	18.43%	17.80%	0.95%

Insider & Institutional Ownership

91.8% of First BanCorp. shares are owned by institutional investors. Comparatively, 18.3% of Bank of the James Financial Group shares are owned by institutional investors. 2.4% of First BanCorp. shares are owned by insiders. Comparatively, 14.5% of Bank of the James Financial Group shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and price targets for First BanCorp. and Bank of the James Financial Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First BanCorp.	0	1	0	0	2.00
Bank of the James Financial Group	0	0	0	0	N/A

First BanCorp. currently has a consensus target price of $14.75, suggesting a potential upside of ∞. Given First BanCorp.’s higher possible upside, research analysts clearly believe First BanCorp. is more favorable than Bank of the James Financial Group.

Summary

First BanCorp. beats Bank of the James Financial Group on 9 of the 13 factors compared between the two stocks.

About First BanCorp.

First BanCorp. operates as a bank holding company for FirstBank Puerto Rico that provides a range of financial products and services to consumers and commercial customers. The company operates through six segments: Commercial and Corporate Banking, Mortgage Banking, Consumer (Retail) Banking, Treasury and Investments, United States Operations, and Virgin Islands Operations. The Commercial and Corporate Banking segment offers commercial loans, including commercial real estate and construction loans, as well as other products, such as cash management and business management services. The Mortgage Banking segment engages in the origination, sale, and servicing of various residential mortgage loans; acquisition and sale of mortgages in the secondary markets; and purchase of mortgage loans from other local banks and mortgage bankers. The Consumer (Retail) Banking segment provides auto loans, finance leases, boat and personal loans, credit card loans, and lines of credit; and interest-bearing and non-interest-bearing checking and savings accounts, and individual retirement accounts and retail certificates of deposit (CDs), as well as insurance agency services. The Treasury and Investments segment offers funding and liquidity management services. The United States Operations segment provides checking, savings, and money market accounts, as well as retail CDs; traditional commercial and industrial, and commercial real estate loans, residential mortgages, home equity loans, lines of credit, FHLB advances, and brokered CDs; and internet banking, cash management, remote deposit capture, and automated clearing house transactions services. The Virgin Islands Operations segment is involved in consumer, commercial lending, and deposit-taking activities. First BanCorp. was founded in 1948 and is headquartered in San Juan, Puerto Rico.

About Bank of the James Financial Group

Bank of the James Financial Group, Inc. operates as the bank holding company for Bank of the James that provides general retail and commercial banking services to individuals, businesses, associations and organizations, and governmental authorities in Virginia, the United States. It offers checking, savings, individual retirement, and health care saving accounts, as well as other time deposits, including money market accounts and certificates of deposit. The company also offers loans to small- and medium-sized businesses for the purchases of equipment, facilities upgrades, inventory acquisition, and various working capital purposes; commercial and residential construction and development loans; commercial real estate mortgage loans; residential mortgage loans; and secured and unsecured consumer loans, such as lines of credit and overdraft lines of credit, as well as personal, automobile, installment, demand, and home equity loans for personal, family, or household purposes. In addition, it provides other banking services, including safe deposit boxes, traveler's checks, direct deposit of payroll and social security checks, automatic drafts for various accounts, treasury management, and credit card merchant services. Further, the company offers securities brokerage and investment services; and telephone and internet banking services comprising online bill pay, as well as acts as an agent for insurance and annuity products. The company was founded in 1998 and is headquartered in Lynchburg, Virginia.