First Community (NASDAQ:FCCO) and Popular (NASDAQ:BPOP) Critical Comparison

Popular (NASDAQ:BPOP) and First Community (NASDAQ:FCCO) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, earnings, risk, dividends, institutional ownership and profitability.

Volatility and Risk

Popular has a beta of 0.62, meaning that its stock price is 38% less volatile than the S&P 500. Comparatively, First Community has a beta of 0.31, meaning that its stock price is 69% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings for Popular and First Community, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Popular	0	1	6	0	2.86
First Community	0	0	2	1	3.33

Popular presently has a consensus price target of $111.57, suggesting a potential upside of 32.98%. First Community has a consensus price target of $29.67, suggesting a potential upside of 39.21%. Given First Community’s stronger consensus rating and higher probable upside, analysts clearly believe First Community is more favorable than Popular.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Popular	14.15%	11.89%	0.90%
First Community	13.49%	10.14%	0.73%

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Popular	$2.80 billion	2.08	$612.80 million	$8.56	9.80
First Community	$61.14 million	2.67	$13.95 million	$1.81	11.77

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

Institutional and Insider Ownership

87.3% of Popular shares are held by institutional investors. Comparatively, 61.3% of First Community shares are held by institutional investors. 2.1% of Popular shares are held by company insiders. Comparatively, 3.0% of First Community shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Dividends

Popular pays an annual dividend of $2.80 per share and has a dividend yield of 3.3%. First Community pays an annual dividend of $0.60 per share and has a dividend yield of 2.8%. Popular pays out 32.7% of its earnings in the form of a dividend. First Community pays out 33.1% 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. Popular is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Popular beats First Community on 11 of the 17 factors compared between the two stocks.

About Popular

Popular, Inc., through its subsidiaries, provides various retail, mortgage, and commercial banking products and services in Puerto Rico, the United States, and the British Virgin Islands. The company provides savings, NOW, money market, and other interest-bearing demand accounts; non-interest bearing demand deposits; and certificates of deposit. It also offers commercial and industrial, commercial multi-family, commercial real estate, and residential mortgage loans; consumer loans, including personal loans, credit cards, automobile loans, home equity lines of credit, and other loans to individual borrowers; construction loans; and lease financing comprising automobile loans/leases. In addition, the company provides investment banking, auto and equipment leasing and financing, broker-dealer, and insurance services; debit cards; and online banking services. Popular, Inc. was founded in 1893 and is headquartered in Hato Rey, Puerto Rico.

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.