National Bankshares (NASDAQ:NKSH – Get Free Report) and Beacon Financial (NYSE:BBT – Get Free Report) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, institutional ownership, analyst recommendations, risk, dividends, earnings and valuation.
Insider and Institutional Ownership
29.7% of National Bankshares shares are owned by institutional investors. Comparatively, 83.1% of Beacon Financial shares are owned by institutional investors. 3.3% of National Bankshares shares are owned by company insiders. Comparatively, 1.1% of Beacon Financial shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Risk and Volatility
National Bankshares has a beta of 0.6, indicating that its share price is 40% less volatile than the S&P 500. Comparatively, Beacon Financial has a beta of 0.56, indicating that its share price is 44% less volatile than the S&P 500.
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| National Bankshares | 0 | 0 | 1 | 1 | 3.50 |
| Beacon Financial | 0 | 4 | 3 | 0 | 2.43 |
Beacon Financial has a consensus price target of $32.50, suggesting a potential upside of 4.53%. Given Beacon Financial’s higher probable upside, analysts plainly believe Beacon Financial is more favorable than National Bankshares.
Profitability
This table compares National Bankshares and Beacon Financial’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| National Bankshares | 23.22% | 10.66% | 1.09% |
| Beacon Financial | 8.96% | 9.15% | 1.01% |
Dividends
National Bankshares pays an annual dividend of $1.50 per share and has a dividend yield of 3.6%. Beacon Financial pays an annual dividend of $1.29 per share and has a dividend yield of 4.1%. National Bankshares pays out 47.2% of its earnings in the form of a dividend. Beacon Financial pays out 97.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Earnings and Valuation
This table compares National Bankshares and Beacon Financial”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| National Bankshares | $85.32 million | 3.14 | $15.83 million | $3.18 | 13.21 |
| Beacon Financial | $882.68 million | 2.95 | $90.27 million | $1.32 | 23.56 |
Beacon Financial has higher revenue and earnings than National Bankshares. National Bankshares is trading at a lower price-to-earnings ratio than Beacon Financial, indicating that it is currently the more affordable of the two stocks.
Summary
National Bankshares beats Beacon Financial on 10 of the 17 factors compared between the two stocks.
About National Bankshares
National Bankshares, Inc. operates as the bank holding company for the National Bank of Blacksburg that provides retail and commercial banking products and services to individuals, businesses, non-profits, and local governments. The company accepts interest-bearing and non-interest-bearing demand deposit accounts, money market deposit accounts, savings accounts, certificates of deposit, health savings accounts, and individual retirement accounts. Its loan products include commercial and agricultural, commercial real estate, residential real estate, home equity, and various consumer loan products, as well as loans for the construction of commercial and residential properties. The company also provides business and consumer debit and credit cards; letters of credit, night depository services, safe deposit boxes, utility payment services, and automatic funds transfer; wealth management, trust, and estate services; non-deposit investment and insurance products; and telephone, mobile, and Internet banking services. The company was founded in 1891 and is headquartered in Blacksburg, Virginia.
About Beacon Financial
Truist Financial Corp. operates as a financial holding company, which engages in the provision of banking services to individuals, businesses and municipalities. The firm offers a variety of loans and lease financing to individuals and entities, including insurance premium financing, permanent commercial real estate financing arrangements, loan servicing for third-party investors, direct consumer finance loans to individuals, credit card lending, automobile financing and equipment financing. It also markets a range of other services, including deposits, life insurance, property and casualty insurance, health Truist Financial Corp. operates as a financial holding company. It engages in the provision of banking services to individuals, businesses and municipalities. The company operates through the following segments: Consumer Banking and Wealth; Corporate and Commercial Banking; and Insurance Holdings. The firm offers a variety of loans and lease financing to individuals and entities, including insurance premium financing, permanent commercial real estate financing arrangements, loan servicing for third-party investors, direct consumer finance loans to individuals, credit card lending, automobile financing and equipment financing. It also markets a range of other services, including deposits, life insurance, property and casualty insurance, health insurance and commercial general liability insurance on an agency basis and through a wholesale insurance brokerage operation, merchant services, trust and retirement services, comprehensive wealth advisory services, asset management and capital markets services. The company was founded on December 6, 2019 and is headquartered in Charlotte, NC. insurance and commercial general liability insurance on an agency basis and through a wholesale insurance brokerage operation, merchant services, trust and retirement services, comprehensive wealth advisory services, asset management and capital markets services. The company was founded on December 6, 2019 and is headquartered in Charlotte, NC.
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