Comparing First Community Bancshares (NASDAQ:FCBC) & Chesapeake Financial Shares (OTCMKTS:CPKF)

First Community Bancshares (NASDAQ:FCBC) and Chesapeake Financial Shares (OTCMKTS:CPKF) are both small-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, earnings, valuation, risk and dividends.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for First Community Bancshares and Chesapeake Financial Shares, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Community Bancshares	0	0	1	0	3.00
Chesapeake Financial Shares	0	0	0	0	0.00

Dividends

First Community Bancshares pays an annual dividend of $1.24 per share and has a dividend yield of 2.9%. Chesapeake Financial Shares pays an annual dividend of $0.68 per share and has a dividend yield of 2.0%. First Community Bancshares pays out 46.6% of its earnings in the form of a dividend. Chesapeake Financial Shares pays out 31.9% 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 Community Bancshares has increased its dividend for 13 consecutive years. First Community Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

35.0% of First Community Bancshares shares are held by institutional investors. Comparatively, 3.7% of Chesapeake Financial Shares shares are held by institutional investors. 3.7% of First Community Bancshares shares are held by insiders. Comparatively, 39.5% of Chesapeake Financial Shares shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares First Community Bancshares and Chesapeake Financial Shares”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Community Bancshares	$185.42 million	4.39	$48.79 million	$2.66	16.06
Chesapeake Financial Shares	$102.27 million	1.59	$10.00 million	$2.13	16.20

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

Volatility and Risk

First Community Bancshares has a beta of 0.48, meaning that its stock price is 52% less volatile than the S&P 500. Comparatively, Chesapeake Financial Shares has a beta of 0.23, meaning that its stock price is 77% less volatile than the S&P 500.

Profitability

This table compares First Community Bancshares and Chesapeake Financial Shares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Community Bancshares	26.32%	10.17%	1.59%
Chesapeake Financial Shares	9.78%	14.64%	1.07%

Summary

First Community Bancshares beats Chesapeake Financial Shares on 12 of the 16 factors compared between the two stocks.

About First Community Bancshares

First Community Bankshares, Inc. operates as the financial holding company for First Community Bank that provides various banking products and services. It offers demand deposit accounts, savings and money market accounts, certificates of deposit, and individual retirement plans; and commercial, consumer real estate, and consumer and other loans. The company also provides trust management, estate administration, and investment advisory services; and investment management services. It serves individuals and businesses across various industries, such as education, government, and health services; coal mining and gas extraction; retail trade; construction; manufacturing; tourism; and transportation. The company operates through branches in West Virginia, Virginia, North Carolina, and Tennessee. Community Bankshares, Inc. was founded in 1874 and is headquartered in Bluefield, Virginia.

About Chesapeake Financial Shares

Chesapeake Financial Shares, Inc. operates as the bank holding company for Chesapeake Bank that provides various banking products and services for individuals and businesses in the United States. The company accepts interest and noninterest checking, savings, and money market accounts; and variable-rate and fixed-term money market accounts, as well as certificates of deposit. It also offers mortgage, and single-family residential and residential construction loans; commercial loans, which include owner-occupied commercial development, retail, builders/contractors, medical, service and professional, hospitality, nonprofits, marine industry, and agricultural and seafood loans; and consumer and other loans. In addition, the company provides merchant processing, accounts receivable financing, wealth management and trust, and mortgage banking services, as well as cash management services. The company was founded in 1900 and is based in Kilmarnock, Virginia.