Analyzing Pinnacle Financial Partners (NYSE:PNFP) and First Community Bancshares (NASDAQ:FCBC)

First Community Bancshares (NASDAQ:FCBC) and Pinnacle Financial Partners (NYSE:PNFP) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, earnings, institutional ownership, risk, valuation, profitability and analyst recommendations.

Valuation & Earnings

This table compares First Community Bancshares and Pinnacle Financial Partners”s top-line 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	4.12	$48.79 million	$2.66	15.06
Pinnacle Financial Partners	$3.32 billion	1.94	$641.86 million	$8.09	10.24

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

Analyst Recommendations

This is a summary of current recommendations and price targets for First Community Bancshares and Pinnacle Financial Partners, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Community Bancshares	0	1	0	0	2.00
Pinnacle Financial Partners	0	8	10	1	2.63

Pinnacle Financial Partners has a consensus price target of $113.41, indicating a potential upside of 36.92%. Given Pinnacle Financial Partners’ stronger consensus rating and higher probable upside, analysts plainly believe Pinnacle Financial Partners is more favorable than First Community Bancshares.

Volatility and Risk

First Community Bancshares has a beta of 0.57, suggesting that its share price is 43% less volatile than the S&P 500. Comparatively, Pinnacle Financial Partners has a beta of 1.02, suggesting that its share price is 2% more volatile than the S&P 500.

Insider and Institutional Ownership

35.0% of First Community Bancshares shares are owned by institutional investors. Comparatively, 87.4% of Pinnacle Financial Partners shares are owned by institutional investors. 3.7% of First Community Bancshares shares are owned by insiders. Comparatively, 1.5% of Pinnacle Financial Partners shares are owned 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.

Dividends

First Community Bancshares pays an annual dividend of $1.24 per share and has a dividend yield of 3.1%. Pinnacle Financial Partners pays an annual dividend of $2.00 per share and has a dividend yield of 2.4%. First Community Bancshares pays out 46.6% of its earnings in the form of a dividend. Pinnacle Financial Partners pays out 24.7% 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 raised its dividend for 13 consecutive years and Pinnacle Financial Partners has raised its dividend for 1 consecutive years. First Community Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares First Community Bancshares and Pinnacle Financial Partners’ 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%
Pinnacle Financial Partners	19.41%	10.10%	1.19%

Summary

Pinnacle Financial Partners beats First Community Bancshares on 10 of the 18 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 Pinnacle Financial Partners

Pinnacle Financial Partners, Inc. operates as the bank holding company for Pinnacle Bank that provides various banking products and services to individuals, businesses, and professional entities in the United States. It accepts various deposits, including savings, noninterest-bearing and interest-bearing checking, money market, and certificate of deposit accounts; and provides treasury management services, such as online wire origination, enhanced ACH origination, positive pay, zero balance and sweep accounts, automated bill pay services, electronic receivables processing, lockbox processing, and merchant card acceptance services, small business and commercial credit cards corporate purchasing cards, and virtual accounting/deposit escrow solutions. The company also offers equipment and working capital loan; commercial real estate loans, such as investment properties and business loan; secured and unsecured loans comprising installment and term, lines of credit, and residential first mortgage, as well as home equity loans and home equity lines of credit; and credit cards for consumers and businesses. In addition, the company provides investment products; brokerage and investment advisory programs; and fiduciary and investment services, including personal trust, investment management, estate administration, endowments, foundations, individual retirement accounts, escrow services, and custody. Further, it offers insurance agency services in the property and casualty area; investment, merger and acquisition advisory services, private debt, equity and mezzanine, and other middle-market advisory services; and other banking services, including telephone and online banking, mobile banking, debit cards, direct deposit and remote deposit capture, mobile deposit option, automated teller machine, and cash management services. Pinnacle Financial Partners, Inc. was incorporated in 2000 and is headquartered in Nashville, Tennessee.