Contrasting Oak Ridge Financial Services (OTCMKTS:BKOR) & First Community (NASDAQ:FCCO)

First Community (NASDAQ:FCCO) and Oak Ridge Financial Services (OTCMKTS:BKOR) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, dividends, risk, analyst recommendations, institutional ownership, valuation and earnings.

Earnings and Valuation

This table compares First Community and Oak Ridge Financial Services”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Community	$114.00 million	2.02	$19.20 million	$2.47	12.13
Oak Ridge Financial Services	$44.28 million	1.87	$8.01 million	$2.92	10.36

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

Dividends

First Community pays an annual dividend of $0.64 per share and has a dividend yield of 2.1%. Oak Ridge Financial Services pays an annual dividend of $0.56 per share and has a dividend yield of 1.9%. First Community pays out 25.9% of its earnings in the form of a dividend. Oak Ridge Financial Services pays out 19.2% 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 has raised its dividend for 4 consecutive years. First Community is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares First Community and Oak Ridge Financial Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Community	16.85%	12.96%	0.98%
Oak Ridge Financial Services	18.10%	N/A	N/A

Analyst Ratings

This is a breakdown of current recommendations and price targets for First Community and Oak Ridge Financial Services, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Community	0	1	2	0	2.67
Oak Ridge Financial Services	0	0	0	0	0.00

First Community currently has a consensus price target of $34.00, suggesting a potential upside of 13.48%. Given First Community’s stronger consensus rating and higher probable upside, analysts clearly believe First Community is more favorable than Oak Ridge Financial Services.

Institutional and Insider Ownership

61.3% of First Community shares are held by institutional investors. Comparatively, 4.2% of Oak Ridge Financial Services shares are held by institutional investors. 5.9% of First Community shares are held by company insiders. Comparatively, 25.6% of Oak Ridge Financial Services shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Risk and Volatility

First Community has a beta of 0.38, suggesting that its stock price is 62% less volatile than the S&P 500. Comparatively, Oak Ridge Financial Services has a beta of 0.1, suggesting that its stock price is 90% less volatile than the S&P 500.

Summary

First Community beats Oak Ridge Financial Services on 13 of the 17 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 Oak Ridge Financial Services

Oak Ridge Financial Services, Inc. operates as a bank holding company for Bank of Oak Ridge that provides various banking products and services for individuals and businesses. It offers checking, savings, and money market accounts; overdrafts; auto, home equity, mortgage, business term, and business SBA loans; business lines of credit; credit cards; and online and mobile banking products and services. The company also provides health savings accounts, identity theft protection, wealth management, cash management, and remote deposit capture services; and auto, home, small business, renters, life, boat and watercraft, classic car, motorcycle, flood, pet, and umbrella insurance products. It operates through a network of branches in Oak Ridge, Greensboro, and Summerfield, North Carolina. The company was founded in 2000 and is based in Oak Ridge, North Carolina.