Analyzing Carter Bankshares (NASDAQ:CARE) and First Commonwealth Financial (NYSE:FCF)

First Commonwealth Financial (NYSE:FCF) and Carter Bankshares (NASDAQ:CARE) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, valuation, institutional ownership, risk, profitability, earnings and analyst recommendations.

Profitability

This table compares First Commonwealth Financial and Carter Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Commonwealth Financial	20.88%	10.43%	1.30%
Carter Bankshares	12.32%	7.64%	0.65%

Risk and Volatility

First Commonwealth Financial has a beta of 0.79, indicating that its share price is 21% less volatile than the S&P 500. Comparatively, Carter Bankshares has a beta of 0.56, indicating that its share price is 44% less volatile than the S&P 500.

Institutional & Insider Ownership

72.6% of First Commonwealth Financial shares are held by institutional investors. Comparatively, 41.5% of Carter Bankshares shares are held by institutional investors. 2.2% of First Commonwealth Financial shares are held by insiders. Comparatively, 2.2% of Carter Bankshares shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Earnings & Valuation

This table compares First Commonwealth Financial and Carter Bankshares”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Commonwealth Financial	$729.51 million	2.44	$152.30 million	$1.46	11.95
Carter Bankshares	$254.63 million	1.91	$31.00 million	$1.38	15.90

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

Analyst Ratings

This is a breakdown of recent recommendations for First Commonwealth Financial and Carter Bankshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Commonwealth Financial	0	3	4	0	2.57
Carter Bankshares	0	1	2	1	3.00

First Commonwealth Financial presently has a consensus target price of $19.75, indicating a potential upside of 13.23%. Carter Bankshares has a consensus target price of $22.00, indicating a potential upside of 0.27%. Given First Commonwealth Financial’s higher possible upside, equities research analysts clearly believe First Commonwealth Financial is more favorable than Carter Bankshares.

Summary

First Commonwealth Financial beats Carter Bankshares on 11 of the 15 factors compared between the two stocks.

About First Commonwealth Financial

First Commonwealth Financial Corporation, a financial holding company, provides various consumer and commercial banking services in the United States. Its consumer services include personal checking accounts, interest-earning checking accounts, savings and health savings accounts, insured money market accounts, debit cards, investment certificates, fixed and variable rate certificates of deposit, mortgage loans, secured and unsecured installment loans, construction and real estate loans, safe deposit facilities, credit cards, credit lines with overdraft checking protection, IRA accounts, and automated teller machine (atm) services, as well as internet, mobile, and telephone banking services. The company's commercial banking services comprise commercial lending, business checking accounts, online account management services, payroll direct deposits, commercial cash management services, and repurchase agreements, as well as ACH origination services. In addition, it offers various trust and asset management services; auto, home, and business insurance, as well as term life insurance; and annuities, mutual funds, and stock and bond brokerage services through a broker-dealer and insurance brokers. The company was founded in 1934 and is headquartered in Indiana, Pennsylvania.

About Carter Bankshares

Carter Bankshares, Inc. operates as the bank holding company for Carter Bank & Trust that provides various banking products and services in the United States. It accepts various deposit products, including checking, savings, retirement, and money market accounts, as well as certificates of deposits. The company also offers commercial loans comprising secured and unsecured loans; consumer loans, such as secured and unsecured loans for financing automobiles, home improvements, education, overdraft protection, and personal investments, as well as residential mortgages; real estate construction, acquisition, commercial, and industrial loans; home equity lines of credit; and credit cards, as well as originates and holds fixed and variable rate mortgage loans. In addition, it provides other banking services that include safe deposit boxes, direct deposit of payroll, and social security checks; online banking products, including online and mobile banking, online account opening, bill pay, e-statement, mobile deposit, digital wallet, and ATM services; title insurance and other financial institution-related products and services; and treasury and corporate cash management services. Carter Bankshares, Inc. was founded in 1974 and is headquartered in Martinsville, Virginia.