Critical Contrast: C&F Financial (NASDAQ:CFFI) vs. First Bank (NASDAQ:FRBA)

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

Institutional & Insider Ownership

37.2% of C&F Financial shares are owned by institutional investors. Comparatively, 64.9% of First Bank shares are owned by institutional investors. 6.3% of C&F Financial shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current recommendations for C&F Financial and First Bank, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
C&F Financial	0	0	0	0	0.00
First Bank	0	0	1	0	3.00

First Bank has a consensus target price of $17.00, indicating a potential upside of 10.82%. Given First Bank’s stronger consensus rating and higher possible upside, analysts clearly believe First Bank is more favorable than C&F Financial.

Dividends

C&F Financial pays an annual dividend of $1.76 per share and has a dividend yield of 2.3%. First Bank pays an annual dividend of $0.24 per share and has a dividend yield of 1.6%. C&F Financial pays out 29.2% of its earnings in the form of a dividend. First Bank pays out 14.4% 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.

Risk and Volatility

C&F Financial has a beta of 0.38, suggesting that its stock price is 62% less volatile than the S&P 500. Comparatively, First Bank has a beta of 0.95, suggesting that its stock price is 5% less volatile than the S&P 500.

Earnings & Valuation

This table compares C&F Financial and First Bank”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
C&F Financial	$170.13 million	1.46	$19.92 million	$6.03	12.78
First Bank	$229.43 million	1.31	$42.24 million	$1.67	9.19

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

Profitability

This table compares C&F Financial and First Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
C&F Financial	11.67%	8.97%	0.79%
First Bank	18.41%	11.06%	1.19%

Summary

First Bank beats C&F Financial on 11 of the 16 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 First Bank

First Bank provides various banking products and services to small to mid-sized businesses and individuals. The company accepts various deposits, including non-interest-bearing demand deposits, interest bearing demand accounts, money market accounts, savings accounts, and certificates of deposit, as well as commercial checking accounts. It also offers various loan products comprising commercial and industrial loans, which include line of credit, inventory, equipment, and short-term working capital financing; commercial real estate loans, such as owner-occupied, investor, construction and development, and multi-family loans; residential real estate loans comprising residential mortgages, first and second lien home equity loans, and revolving lines of credit; and consumer and other loans consists of auto, personal, traditional installment, and other loans. The company also provides electronic banking services, including Internet and mobile banking, electronic bill payment, and banking by phone; ATM and debit cards, and wire and ACH transfer services; remote deposit capture; and cash management services, as well as engages in the capital markets activities. It operates full-service branches in Cinnaminson, Delanco, Denville, Ewing, Fairfield, Flemington, Hamilton, Lawrence, Monroe, Pennington, Randolph, Somerset, and Williamstown, New Jersey; Doylestown, Trevose, Warminster, and West Chester, Paoli, Malvern, Coventry, Devon, Lionville, and Glen Mills Pennsylvania; and Palm Beach, Florida. First Bank was incorporated in 2007 and is headquartered in Hamilton, New Jersey.