First National (NASDAQ:FXNC) and Regions Financial (NYSE:RF) Financial Analysis

Regions Financial (NYSE:RF) and First National (NASDAQ:FXNC) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, valuation, risk, earnings, analyst recommendations, dividends and institutional ownership.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Regions Financial and First National, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Regions Financial	3	9	6	0	2.17
First National	0	1	0	0	2.00

Regions Financial currently has a consensus target price of $29.91, indicating a potential upside of 16.71%. Given Regions Financial’s stronger consensus rating and higher possible upside, research analysts clearly believe Regions Financial is more favorable than First National.

Earnings & Valuation

This table compares Regions Financial and First National”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Regions Financial	$9.61 billion	2.30	$2.16 billion	$2.29	11.19
First National	$116.51 million	2.05	$17.70 million	$1.97	13.44

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

Insider & Institutional Ownership

79.4% of Regions Financial shares are held by institutional investors. Comparatively, 33.9% of First National shares are held by institutional investors. 0.3% of Regions Financial shares are held by company insiders. Comparatively, 14.3% of First National shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Dividends

Regions Financial pays an annual dividend of $1.06 per share and has a dividend yield of 4.1%. First National pays an annual dividend of $0.68 per share and has a dividend yield of 2.6%. Regions Financial pays out 46.3% of its earnings in the form of a dividend. First National pays out 34.5% 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. Regions Financial has raised its dividend for 12 consecutive years and First National has raised its dividend for 10 consecutive years. Regions Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Regions Financial and First National’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Regions Financial	22.44%	12.55%	1.37%
First National	15.19%	11.01%	0.94%

Volatility and Risk

Regions Financial has a beta of 1.02, meaning that its share price is 2% more volatile than the S&P 500. Comparatively, First National has a beta of 0.51, meaning that its share price is 49% less volatile than the S&P 500.

Summary

Regions Financial beats First National on 14 of the 17 factors compared between the two stocks.

About Regions Financial

Regions Financial Corporation, a financial holding company, provides banking and bank-related services to individual and corporate customers. It operates through three segments: Corporate Bank, Consumer Bank, and Wealth Management. The Corporate Bank segment offers commercial banking services, such as commercial and industrial, commercial real estate, and investor real estate lending; equipment lease financing; deposit products; and securities underwriting and placement, loan syndication and placement, foreign exchange, derivatives, merger and acquisition, and other advisory services. It serves corporate, middle market, and commercial real estate developers and investors. The Consumer Bank segment provides consumer banking products and services related to residential first mortgages, home equity lines and loans, consumer credit cards, and other consumer loans, as well as deposits. The Wealth Management segment offers credit related products, and retirement and savings solutions; and trust and investment management, asset management, and estate planning services to individuals, businesses, governmental institutions, and non-profit entities. It also provides investment and insurance products; low-income housing tax credit corporate fund syndication services; and other specialty financing services. The company was founded in 1971 and is headquartered in Birmingham, Alabama.

About First National

First National Corporation operates as the bank holding company for First Bank that provides various commercial banking services to small and medium-sized businesses, individuals, estates, local governmental entities, and non-profit organizations in Virginia. The company's deposit products include checking, savings, money market, and individual retirement accounts, as well as certificates of deposit and treasury management solutions. Its loan products comprise construction loans, including residential, land acquisition, and development loans; 1-4 family residential real estate loans; and commercial real estate loans that are secured by commercial real estate, including multi-family residential buildings, office and retail buildings, hotels, industrial buildings, and religious facilities. In addition, the company's loan products include commercial and industrial loans that are secured by business assets, such as accounts receivable, equipment, and inventory; home equity loans; and secured and unsecured consumer loans, such as lines of credit, automobile loans, deposit account loans, and installment and demand loans. Further, it provides wealth management services, including estate planning, investment management of assets, trustee under an agreement, trustee under a will, and estate settlement. Additionally, the company offers title insurance and investment services; and holds other real estate owned and office sites, as well as provides internet and mobile banking, remote deposit capture, and other traditional banking services. First National Corporation was founded in 1907 and is headquartered in Strasburg, Virginia.