Analyzing National Bankshares (NASDAQ:NKSH) and C&F Financial (NASDAQ:CFFI)

C&F Financial (NASDAQ:CFFI) and National Bankshares (NASDAQ:NKSH) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their earnings, dividends, institutional ownership, risk, profitability, analyst recommendations and valuation.

Institutional & Insider Ownership

37.2% of C&F Financial shares are held by institutional investors. Comparatively, 29.7% of National Bankshares shares are held by institutional investors. 6.3% of C&F Financial shares are held by insiders. Comparatively, 3.2% of National Bankshares shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares C&F Financial and National Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
C&F Financial	14.43%	11.03%	1.01%
National Bankshares	18.55%	9.78%	0.93%

Dividends

C&F Financial pays an annual dividend of $1.84 per share and has a dividend yield of 2.4%. National Bankshares pays an annual dividend of $1.56 per share and has a dividend yield of 4.1%. C&F Financial pays out 22.2% of its earnings in the form of a dividend. National Bankshares pays out 62.9% 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. C&F Financial has raised its dividend for 1 consecutive years.

Valuation & Earnings

This table compares C&F Financial and National Bankshares”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
C&F Financial	$186.13 million	1.32	$26.83 million	$8.28	9.18
National Bankshares	$85.32 million	2.85	$15.83 million	$2.48	15.37

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

Volatility & Risk

C&F Financial has a beta of 0.35, suggesting that its share price is 65% less volatile than the S&P 500. Comparatively, National Bankshares has a beta of 0.72, suggesting that its share price is 28% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for C&F Financial and National Bankshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
C&F Financial	0	1	0	0	2.00
National Bankshares	0	1	0	0	2.00

Summary

C&F Financial beats National Bankshares on 9 of the 14 factors compared between the two stocks.

About C&F Financial

C&F Financial Corp. is a bank holding company, which engages in the provision of banking services to individuals and businesses. It operates through the following segments: Community Banking, Mortgage Banking and Consumer Finance. The Community Banking segment provides checking and savings deposit accounts, business, real estate, development, mortgage, home equity, and installment loans. The Mortgage Banking segment offers ancillary mortgage loan origination services for loan settlement and residential appraisals. The Consumer Finance segment consists of automobile financing through lending programs that are designed to serve customers in the non-prime market who have limited access to traditional automobile financing. The company was founded on March 8, 1994 and is headquartered in Toano, VA.

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.