First Community (NASDAQ:FCCO) and Pinnacle Bankshares (OTCMKTS:PPBN) Critical Contrast

First Community (NASDAQ:FCCO) and Pinnacle Bankshares (OTCMKTS:PPBN) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, institutional ownership, risk, dividends, valuation and earnings.

Profitability

This table compares First Community and Pinnacle Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Community	16.85%	12.96%	0.98%
Pinnacle Bankshares	18.24%	12.74%	1.04%

Valuation and Earnings

This table compares First Community and Pinnacle Bankshares”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Community	$114.00 million	2.07	$19.20 million	$2.47	12.40
Pinnacle Bankshares	$59.05 million	1.74	$10.77 million	$4.84	9.51

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

Analyst Recommendations

This is a breakdown of current ratings and price targets for First Community and Pinnacle Bankshares, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Community	0	1	2	0	2.67
Pinnacle Bankshares	0	0	0	0	0.00

First Community presently has a consensus price target of $34.00, suggesting a potential upside of 11.04%. Given First Community’s stronger consensus rating and higher probable upside, analysts plainly believe First Community is more favorable than Pinnacle Bankshares.

Risk & Volatility

First Community has a beta of 0.38, suggesting that its stock price is 62% less volatile than the S&P 500. Comparatively, Pinnacle Bankshares has a beta of 0.28, suggesting that its stock price is 72% less volatile than the S&P 500.

Dividends

First Community pays an annual dividend of $0.64 per share and has a dividend yield of 2.1%. Pinnacle Bankshares pays an annual dividend of $1.12 per share and has a dividend yield of 2.4%. First Community pays out 25.9% of its earnings in the form of a dividend. Pinnacle Bankshares pays out 23.1% 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 has increased its dividend for 4 consecutive years. Pinnacle Bankshares is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

61.3% of First Community shares are owned by institutional investors. Comparatively, 3.8% of Pinnacle Bankshares shares are owned by institutional investors. 5.9% of First Community shares are owned by company insiders. Comparatively, 6.5% of Pinnacle Bankshares shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

First Community beats Pinnacle Bankshares on 11 of the 17 factors compared between the two stocks.

About First Community

First Community Corporation operates as the bank holding company for First Community Bank that provides various commercial and retail banking products and services to small-to-medium sized businesses, professionals, and individuals. The company operates through Commercial and Retail Banking, Mortgage Banking, and Investment Advisory and Non-Deposit segments. Its deposit products include checking, NOW, savings, and individual retirement accounts; and demand deposits, as well as other time deposits, such as daily money market accounts and longer-term certificates of deposit. The company's loan portfolio comprises commercial loans that include secured and unsecured loans for working capital, business expansion, and the purchase of equipment and machinery; consumer loans, including secured and unsecured loans for financing automobiles, home improvements, education, and personal investments; real estate construction and acquisition loans; and fixed and variable rate mortgage loans. It also provides online banking, internet banking, cash management, safe deposit boxes, direct deposit of payroll and social security checks, and automatic drafts for various accounts. In addition, the company offers non-deposit investment products and other investment brokerage services; VISA and MasterCard credit card services; investment advisory services; and insurance services. The company was incorporated in 1994 and is headquartered in Lexington, South Carolina.

About Pinnacle Bankshares

Pinnacle Bankshares Corporation operates as the bank holding company for First National Bank that provides a range of commercial and retail banking products and services. The company accepts checking accounts, savings and time deposits, individual retirement accounts, certificates of deposit, and money market accounts. Its loan products include residential and commercial mortgage loans, home equity loans, consumer installment loans, agricultural loans, investment loans, small business loans, commercial lines of credit, and letters of credit. The company also provides credit cards; insurance products, including property and casualty, life, and health; investment and annuity products; and overdraft protection, merchant bankcard processing, cash management, remote deposit capture, night drop, safe deposit boxes, and notary services, as well as telephone, mobile, and online banking services. It operates branches in Amherst County, Bedford County, Campbell County, Pittsylvania County; and the city of Danville, Lynchburg and Charlottesville. The company was founded in 1908 and is headquartered in Altavista, Virginia.