Head to Head Analysis: First Community Bankshares (NASDAQ:FCBC) vs. Cadence Bank (NYSE:CADE)

First Community Bankshares (NASDAQ:FCBC) and Cadence Bank (NYSE:CADE) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, risk, earnings and valuation.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
First Community Bankshares	27.10%	11.04%	1.68%
Cadence Bank	23.83%	8.97%	0.86%

Volatility & Risk

First Community Bankshares has a beta of 0.53, indicating that its stock price is 47% less volatile than the S&P 500. Comparatively, Cadence Bank has a beta of 0.98, indicating that its stock price is 2% less volatile than the S&P 500.

Dividends

First Community Bankshares pays an annual dividend of $1.16 per share and has a dividend yield of 2.7%. Cadence Bank pays an annual dividend of $1.00 per share and has a dividend yield of 3.1%. First Community Bankshares pays out 42.8% of its earnings in the form of a dividend. Cadence Bank pays out 31.9% 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. First Community Bankshares has raised its dividend for 12 consecutive years and Cadence Bank has raised its dividend for 13 consecutive years. Cadence Bank is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

35.0% of First Community Bankshares shares are held by institutional investors. Comparatively, 84.6% of Cadence Bank shares are held by institutional investors. 3.7% of First Community Bankshares shares are held by insiders. Comparatively, 2.2% of Cadence Bank shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Valuation and Earnings

This table compares First Community Bankshares and Cadence Bank’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Community Bankshares	$174.62 million	4.45	$48.02 million	$2.71	15.63
Cadence Bank	$2.19 billion	2.68	$542.30 million	$3.13	10.32

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

Analyst Recommendations

This is a summary of recent ratings for First Community Bankshares and Cadence Bank, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Community Bankshares	1	1	0	0	1.50
Cadence Bank	0	5	6	1	2.67

First Community Bankshares presently has a consensus target price of $35.50, suggesting a potential downside of 16.21%. Cadence Bank has a consensus target price of $31.00, suggesting a potential downside of 4.05%. Given Cadence Bank’s stronger consensus rating and higher possible upside, analysts clearly believe Cadence Bank is more favorable than First Community Bankshares.

Summary

Cadence Bank beats First Community Bankshares on 12 of the 18 factors compared between the two stocks.

About First Community Bankshares

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 Cadence Bank

Cadence Bank provides commercial banking and financial services. Its products and services include consumer banking, consumer loans, mortgages, home equity lines and loans, credit cards, commercial and business banking, treasury management, specialized and asset-based lending, commercial real estate, equipment financing, and correspondent banking services. The company's products and services also comprise small business administration lending, foreign exchange, wealth management, investment and trust, financial planning, retirement plan management, and personal and business insurance services. Cadence Bank was founded in 1876 and is headquartered in Tupelo, Mississippi.