First Bancorp, Inc (ME) (NASDAQ:FNLC) and Auburn National Bancorporation (NASDAQ:AUBN) Critical Analysis

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

Insider & Institutional Ownership

39.5% of Auburn National Bancorporation shares are held by institutional investors. Comparatively, 40.4% of First Bancorp, Inc (ME) shares are held by institutional investors. 18.7% of Auburn National Bancorporation shares are held by company insiders. Comparatively, 5.1% of First Bancorp, Inc (ME) shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Auburn National Bancorporation and First Bancorp, Inc (ME), as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Auburn National Bancorporation	0	1	0	0	2.00
First Bancorp, Inc (ME)	0	0	1	0	3.00

Valuation & Earnings

This table compares Auburn National Bancorporation and First Bancorp, Inc (ME)”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Auburn National Bancorporation	$34.26 million	2.80	$7.26 million	$2.41	11.41
First Bancorp, Inc (ME)	$177.61 million	2.23	$34.39 million	$3.37	10.44

First Bancorp, Inc (ME) has higher revenue and earnings than Auburn National Bancorporation. First Bancorp, Inc (ME) 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.

Dividends

Auburn National Bancorporation pays an annual dividend of $1.08 per share and has a dividend yield of 3.9%. First Bancorp, Inc (ME) pays an annual dividend of $1.52 per share and has a dividend yield of 4.3%. Auburn National Bancorporation pays out 44.8% of its earnings in the form of a dividend. First Bancorp, Inc (ME) pays out 45.1% 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 Bancorp, Inc (ME) has increased its dividend for 6 consecutive years. First Bancorp, Inc (ME) is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Auburn National Bancorporation and First Bancorp, Inc (ME)’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Auburn National Bancorporation	18.60%	9.10%	0.81%
First Bancorp, Inc (ME)	21.43%	13.30%	1.18%

Risk and Volatility

Auburn National Bancorporation has a beta of 0.42, suggesting that its stock price is 58% less volatile than the S&P 500. Comparatively, First Bancorp, Inc (ME) has a beta of 0.49, suggesting that its stock price is 51% less volatile than the S&P 500.

Summary

First Bancorp, Inc (ME) beats Auburn National Bancorporation on 12 of the 16 factors compared between the two stocks.

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.

About First Bancorp, Inc (ME)

The First Bancorp, Inc. operates as the holding company for First National Bank that provides a range of banking products and services to individuals and businesses. It offers various deposit products, including demand, NOW, time, savings, money market, and certificates of deposit accounts. The company also provides commercial loans comprising commercial real estate owner occupied, such as mortgage loans to finance investments in real property such as retail space, offices, industrial buildings, hotels, educational facilities, and other specific or mixed use properties; commercial real estate non-owner occupied loans; commercial construction to finance construction in a mix of owner- and nonowner occupied commercial real estate properties; and commercial and industrial loans, including revolving and term loan for financing working capital and/or capital investment. In addition, it offers commercial multifamily loans; residential real estate term and residential real estate construction loans; loans to municipalities in Maine for capitalized expenditures, construction projects, or tax anticipation notes; home equity revolving and term loans; and personal lines of credit and amortizing loans for various purposes, such as autos, recreational vehicles, debt consolidation, personal expenses, or overdraft protection. Further, the company offers private banking, financial planning, investment management, and trust services to individuals, businesses, non-profit organizations and municipalities; and brokerage, annuity, and various insurance products, as well as payment processing services. It operates through full-service banking offices in Lincoln, Knox, Waldo, Penobscot, Hancock, and Washington counties in the Mid-Coast, Eastern, and Down East regions of Maine. The company was formerly known as First National Lincoln Corporation and changed its name to The First Bancorp, Inc. in April 2008. The First Bancorp, Inc. was founded in 1864 and is based in Damariscotta, Maine.