First BanCorp. (NYSE:FBP) versus National Bankshares (NASDAQ:NKSH) Financial Review

First BanCorp. (NYSE:FBP) and National Bankshares (NASDAQ:NKSH) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, earnings, dividends, risk, profitability, analyst recommendations and institutional ownership.

Insider and Institutional Ownership

97.9% of First BanCorp. shares are held by institutional investors. Comparatively, 29.7% of National Bankshares shares are held by institutional investors. 2.3% of First BanCorp. shares are held by company insiders. Comparatively, 3.2% of National Bankshares shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Dividends

First BanCorp. pays an annual dividend of $0.72 per share and has a dividend yield of 3.6%. National Bankshares pays an annual dividend of $1.56 per share and has a dividend yield of 5.3%. First BanCorp. pays out 35.0% of its earnings in the form of a dividend. National Bankshares pays out 76.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. First BanCorp. has increased its dividend for 6 consecutive years.

Risk and Volatility

First BanCorp. has a beta of 1.01, indicating that its stock price is 1% more volatile than the S&P 500. Comparatively, National Bankshares has a beta of 0.78, indicating that its stock price is 22% less volatile than the S&P 500.

Profitability

This table compares First BanCorp. and National Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First BanCorp.	26.73%	17.45%	1.64%
National Bankshares	15.56%	8.81%	0.80%

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First BanCorp.	$944.84 million	3.35	$298.72 million	$2.06	9.74
National Bankshares	$52.54 million	3.56	$7.62 million	$2.04	14.40

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

Analyst Ratings

This is a breakdown of current ratings and price targets for First BanCorp. and National Bankshares, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First BanCorp.	0	1	3	0	2.75
National Bankshares	0	1	0	0	2.00

First BanCorp. presently has a consensus target price of $24.00, indicating a potential upside of 19.58%. Given First BanCorp.’s stronger consensus rating and higher probable upside, analysts plainly believe First BanCorp. is more favorable than National Bankshares.

Summary

First BanCorp. beats National Bankshares on 13 of the 17 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; hedging activities; and purchase of mortgage loans from branch 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, term and construction loan, 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 National Bankshares

National Bankshares, Inc. operates as the bank holding company for the National Bank of Blacksburg that provides retail and commercial banking products and services to individuals, businesses, non-profits, and local governments. The company accepts interest-bearing and non-interest-bearing demand deposit accounts, money market deposit accounts, savings accounts, certificates of deposit, health savings accounts, and individual retirement accounts. Its loan products include commercial and agricultural, commercial real estate, residential real estate, home equity, and various consumer loan products, as well as loans for the construction of commercial and residential properties. The company also provides business and consumer debit and credit cards; letters of credit, night depository services, safe deposit boxes, utility payment services, and automatic funds transfer; wealth management, trust, and estate services; non-deposit investment and insurance products; and telephone, mobile, and Internet banking services. The company was founded in 1891 and is headquartered in Blacksburg, Virginia.