Head to Head Contrast: Dime Community Bancshares (NASDAQ:DCOM) & First National (NASDAQ:FXNC)

Dime Community Bancshares (NASDAQ:DCOM) and First National (NASDAQ:FXNC) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, risk, valuation, profitability, analyst recommendations, institutional ownership and dividends.

Earnings & Valuation

This table compares Dime Community Bancshares and First National”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Dime Community Bancshares	$730.38 million	2.00	$110.68 million	$2.36	14.12
First National	$116.51 million	2.05	$17.70 million	$1.97	13.49

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

Analyst Recommendations

This is a breakdown of current ratings and target prices for Dime Community Bancshares and First National, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Dime Community Bancshares	0	2	3	1	2.83
First National	0	1	0	0	2.00

Dime Community Bancshares presently has a consensus target price of $38.00, suggesting a potential upside of 14.05%. Given Dime Community Bancshares’ stronger consensus rating and higher possible upside, research analysts plainly believe Dime Community Bancshares is more favorable than First National.

Dividends

Dime Community Bancshares pays an annual dividend of $1.00 per share and has a dividend yield of 3.0%. First National pays an annual dividend of $0.68 per share and has a dividend yield of 2.6%. Dime Community Bancshares pays out 42.4% 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. Dime Community Bancshares has increased its dividend for 2 consecutive years and First National has increased its dividend for 10 consecutive years.

Risk and Volatility

Dime Community Bancshares has a beta of 1.09, suggesting that its stock price is 9% more volatile than the S&P 500. Comparatively, First National has a beta of 0.51, suggesting that its stock price is 49% less volatile than the S&P 500.

Institutional and Insider Ownership

75.3% of Dime Community Bancshares shares are held by institutional investors. Comparatively, 33.9% of First National shares are held by institutional investors. 7.1% of Dime Community Bancshares 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 endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Dime Community Bancshares	15.15%	9.12%	0.83%
First National	15.19%	11.01%	0.94%

Summary

Dime Community Bancshares beats First National on 11 of the 18 factors compared between the two stocks.

About Dime Community Bancshares

Dime Community Bancshares, Inc. operates as the holding company for Dime Community Bank that engages in the provision of various commercial banking and financial services. The company accepts time, savings, and demand deposits from the businesses, consumers, and local municipalities. It also offers commercial real estate loans; multi-family mortgage loans; residential mortgage loans; letters of credit; secured and unsecured commercial and consumer loans; lines of credit; home equity loans; and construction and land loans. In addition, the company invests in Federal Home Loan Bank, Federal National Mortgage Association, Government National Mortgage Association, and Federal Home Loan Mortgage Corporation mortgage-backed securities, collateralized mortgage obligations, and other asset backed securities; U.S. Treasury securities; New York state and local municipal obligations; U.S. government-sponsored enterprise securities; and corporate bonds. Further, it offers certificate of deposit account registry services and insured cash sweep programs; federal deposit insurance corporation insurance; merchant credit and debit card processing, automated teller machines, cash management services, lockbox processing, online banking services, remote deposit capture, safe deposit boxes, and individual retirement accounts; investment products and services through a third-party broker dealer; and title insurance broker services for small and medium sized businesses, and municipal and consumer relationships. The company was founded in 1910 and is headquartered in Hauppauge, New York.

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.