Contrasting First Community (NASDAQ:FCCO) & Hilltop (NYSE:HTH)

First Community (NASDAQ:FCCOGet Rating) and Hilltop (NYSE:HTHGet Rating) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, dividends, earnings, valuation, institutional ownership, profitability and analyst recommendations.

Dividends

First Community pays an annual dividend of $0.52 per share and has a dividend yield of 2.9%. Hilltop pays an annual dividend of $0.60 per share and has a dividend yield of 2.2%. First Community pays out 25.7% of its earnings in the form of a dividend. Hilltop pays out 22.6% 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 1 consecutive years and Hilltop has raised its dividend for 5 consecutive years.

Institutional and Insider Ownership

50.0% of First Community shares are held by institutional investors. Comparatively, 61.2% of Hilltop shares are held by institutional investors. 4.0% of First Community shares are held by insiders. Comparatively, 23.4% of Hilltop shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First Community $61.42 million 2.19 $15.47 million $2.02 8.81
Hilltop $1.94 billion 0.89 $374.49 million $2.66 10.09

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

Analyst Ratings

This is a breakdown of recent recommendations and price targets for First Community and Hilltop, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Community 0 1 0 0 2.00
Hilltop 1 0 0 0 1.00

First Community presently has a consensus price target of $20.00, indicating a potential upside of 12.42%. Hilltop has a consensus price target of $28.00, indicating a potential upside of 4.28%. Given First Community’s stronger consensus rating and higher probable upside, equities analysts plainly believe First Community is more favorable than Hilltop.

Profitability

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

Net Margins Return on Equity Return on Assets
First Community 25.09% 11.69% 0.94%
Hilltop 13.07% 8.78% 1.17%

Risk and Volatility

First Community has a beta of 0.55, suggesting that its share price is 45% less volatile than the S&P 500. Comparatively, Hilltop has a beta of 1.11, suggesting that its share price is 11% more volatile than the S&P 500.

Summary

Hilltop beats First Community on 10 of the 16 factors compared between the two stocks.

About First Community

(Get Rating)

First Community Corporation operates as the bank holding company for First Community Bank which offers various commercial and retail banking products and services to small-to-medium sized businesses, professional concerns, 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 consist of 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 other banking services, which include online banking, internet banking, cash management, safe deposit boxes, travelers checks, 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. It operates 21 full-service offices located in the Lexington County, Richland County, Newberry County, Kershaw County, Greenville County, Anderson County, Pickens County, and Aiken County, South Carolina; and Richmond County and Columbia County, Georgia. The company was incorporated in 1994 and is headquartered in Lexington, South Carolina.

About Hilltop

(Get Rating)

Hilltop Holdings Inc. provides business and consumer banking, and financial products and services. It operates through three segments: Banking, Broker-Dealer, and Mortgage Origination. The Banking segment offers savings, checking, interest-bearing checking, and money market accounts; certificates of deposit; lines and letters of credit, home improvement and equity loans, loans for purchasing and carrying securities, equipment loans and leases, agricultural and commercial real estate loans, and other loans; and commercial and industrial loans, and term and construction finance. This segment also provides treasury management, wealth management, asset management, check cards, safe deposit boxes, online banking, bill pay, trust, and overdraft services; and estate planning, management and administration, investment portfolio management, employee benefit accounts, and individual retirement accounts, as well as automated teller machines. The Broker-Dealer segment offers public finance services that assist public entities in originating, syndicating, and distributing securities of municipalities and political subdivisions; specialized advisory and investment banking services; advice and guidance to arbitrage rebate compliance, portfolio management, and local government investment pool administration; structured finance services, which include advisory services for derivatives and commodities; sells, trades in, and underwrites U.S. government and government agency bonds, corporate bonds, and municipal bonds, as well as mortgage-backed, asset-backed, and commercial mortgage-backed securities and structured products. This segment also provides asset and liability management advisory, clearing, retail, and securities lending services. The Mortgage Origination segment offers mortgage, jumbo, Federal Housing Administration, Veterans Affairs, and United States Department of Agriculture loans. Hilltop Holdings Inc. was founded in 1998 and is headquartered in Dallas, Texas.

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