First Community (NASDAQ:FCCO) and Auburn National Bancorporation (NASDAQ:AUBN) Critical Contrast

First Community (NASDAQ:FCCO) and Auburn National Bancorporation (NASDAQ:AUBN) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, valuation, institutional ownership, risk, profitability, dividends and analyst recommendations.

Dividends

First Community pays an annual dividend of $0.60 per share and has a dividend yield of 2.6%. Auburn National Bancorporation pays an annual dividend of $1.08 per share and has a dividend yield of 5.0%. First Community pays out 42.0% of its earnings in the form of a dividend. Auburn National Bancorporation pays out 469.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Auburn National Bancorporation has increased its dividend for 22 consecutive years. Auburn National Bancorporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

61.3% of First Community shares are owned by institutional investors. Comparatively, 39.5% of Auburn National Bancorporation shares are owned by institutional investors. 3.0% of First Community shares are owned by company insiders. Comparatively, 24.4% of Auburn National Bancorporation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares First Community and Auburn National Bancorporation’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Community	11.60%	8.33%	0.59%
Auburn National Bancorporation	1.80%	0.85%	0.06%

Earnings and Valuation

This table compares First Community and Auburn National Bancorporation”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Community	$55.96 million	3.09	$11.84 million	$1.43	15.87
Auburn National Bancorporation	$22.92 million	3.32	$1.39 million	$0.23	94.78

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

Analyst Ratings

This is a breakdown of current ratings for First Community and Auburn National Bancorporation, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Community	0	0	1	0	3.00
Auburn National Bancorporation	0	0	0	0	N/A

First Community currently has a consensus price target of $21.00, suggesting a potential downside of 7.49%. Given First Community’s higher probable upside, equities analysts clearly believe First Community is more favorable than Auburn National Bancorporation.

Volatility and Risk

First Community has a beta of 0.41, meaning that its stock price is 59% less volatile than the S&P 500. Comparatively, Auburn National Bancorporation has a beta of 0.53, meaning that its stock price is 47% less volatile than the S&P 500.

Summary

First Community beats Auburn National Bancorporation on 10 of the 16 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 Auburn National Bancorporation

Auburn National Bancorporation, Inc. operates as the bank holding company for AuburnBank that provides various banking products and services in East Alabama. The company offers checking, savings, and transaction deposit accounts, as well as certificates of deposit. It also provides commercial, financial, agricultural, real estate construction, and consumer loan products; and other financial services. In addition, the company offers automated teller services; debit cards; online banking, bill payment, and other electronic banking services; and safe deposit boxes. Auburn National Bancorporation, Inc. was founded in 1907 and is headquartered in Auburn, Alabama.