First Commonwealth Financial (NYSE:FCF) and Southern First Bancshares (NASDAQ:SFST) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, risk, earnings, profitability, valuation, dividends and institutional ownership.
Analyst Ratings
This is a summary of current ratings and target prices for First Commonwealth Financial and Southern First Bancshares, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| First Commonwealth Financial | 0 | 5 | 2 | 0 | 2.29 |
| Southern First Bancshares | 0 | 1 | 2 | 0 | 2.67 |
First Commonwealth Financial presently has a consensus price target of $11.0833, indicating a potential downside of 23.09%. Southern First Bancshares has a consensus price target of $39.50, indicating a potential downside of 21.09%. Given Southern First Bancshares' stronger consensus rating and higher probable upside, analysts plainly believe Southern First Bancshares is more favorable than First Commonwealth Financial.
Volatility and Risk
First Commonwealth Financial has a beta of 1.13, suggesting that its share price is 13% more volatile than the S&P 500. Comparatively, Southern First Bancshares has a beta of 1.07, suggesting that its share price is 7% more volatile than the S&P 500.
Profitability
This table compares First Commonwealth Financial and Southern First Bancshares' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| First Commonwealth Financial | 18.68% | 7.42% | 0.89% |
| Southern First Bancshares | 14.18% | 7.95% | 0.71% |
Valuation and Earnings
This table compares First Commonwealth Financial and Southern First Bancshares' top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| First Commonwealth Financial | $410.75 million | 3.38 | $105.33 million | $1.10 | 13.10 |
| Southern First Bancshares | $107.64 million | 3.65 | $27.86 million | $3.58 | 13.98 |
First Commonwealth Financial has higher revenue and earnings than Southern First Bancshares. First Commonwealth Financial is trading at a lower price-to-earnings ratio than Southern First Bancshares, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
67.0% of First Commonwealth Financial shares are owned by institutional investors. Comparatively, 74.1% of Southern First Bancshares shares are owned by institutional investors. 1.5% of First Commonwealth Financial shares are owned by company insiders. Comparatively, 8.5% of Southern First Bancshares shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Summary
Southern First Bancshares beats First Commonwealth Financial on 8 of the 13 factors compared between the two stocks.
