Contrasting First Capital (NASDAQ:FCAP) and Suruga Bank (OTCMKTS:SUGBY)

First Capital (NASDAQ:FCAP) and Suruga Bank (OTCMKTS:SUGBY) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, dividends, profitability, analyst recommendations, valuation, risk and institutional ownership.

Analyst Recommendations

This is a summary of recent recommendations and price targets for First Capital and Suruga Bank, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Capital	0	1	0	0	2.00
Suruga Bank	0	0	0	0	0.00

Risk and Volatility

First Capital has a beta of 0.68, suggesting that its share price is 32% less volatile than the S&P 500. Comparatively, Suruga Bank has a beta of -0.09, suggesting that its share price is 109% less volatile than the S&P 500.

Profitability

This table compares First Capital and Suruga Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Capital	23.29%	12.56%	1.23%
Suruga Bank	24.79%	8.96%	0.77%

Insider & Institutional Ownership

11.6% of First Capital shares are owned by institutional investors. 4.0% of First Capital shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

First Capital pays an annual dividend of $1.24 per share and has a dividend yield of 2.6%. Suruga Bank pays an annual dividend of $1.70 per share and has a dividend yield of 2.1%. First Capital pays out 28.1% of its earnings in the form of a dividend. Suruga Bank pays out 18.4% 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 Capital has increased its dividend for 2 consecutive years. First Capital is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares First Capital and Suruga Bank”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Capital	$48.46 million	3.27	$11.94 million	$4.41	10.75
Suruga Bank	$598.19 million	2.64	$133.17 million	$9.26	8.64

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

Summary

First Capital beats Suruga Bank on 10 of the 15 factors compared between the two stocks.

About First Capital

First Capital, Inc. operates as the bank holding company for First Harrison Bank that provides various banking services to individuals and business customers. The company offers various deposit instruments, including non-interest-bearing checking accounts, negotiable order of withdrawal accounts, money market accounts, regular savings accounts, certificates of deposit, and retirement savings plans. It also provides residential mortgage loans, construction loans for residential and commercial properties, and commercial real estate loans, as well as commercial business loans. In addition, the company originates mortgage loans for sale in the secondary market and sells non-deposit investment products; and offers various secured or guaranteed consumer loans comprising automobile and truck loans, home equity loans, home improvement loans, boat loans, mobile home loans, credit cards and other personal loans, and loans secured by savings deposits, as well as unsecured consumer loans. First Capital, Inc. was founded in 1891 and is based in Corydon, Indiana.

About Suruga Bank

Suruga Bank Ltd. provides various banking and financial products and services to individuals and corporate customers in Japan. The company offers deposit products, such as time, ordinary, savings, foreign currency, and other deposits, as well as current and general accounts; card, housing, second house, startup, and business up term loans, as well as loans by purpose; credit and debit cards; overdrafts; and other financing products. It also provides investment trust, public bond, pension contribution, insurance, inheritance/trust, lottery, foreign currency, pay-easy, web direct, safe deposit box, external linkage, foreign remittance, fund management, e-combination, payment, nursing care/medical care/dispensing compensation receivable factoring, mortgage, and Internet and telephone banking services. In addition, the company offers staffing, money lending, guarantee, printing, leasing, and agency services. The company was incorporated in 1895 and is headquartered in Numazu, Japan.