Analyzing First Capital (NASDAQ:FCAP) and FFW (OTCMKTS:FFWC)

First Capital (NASDAQ:FCAP) and FFW (OTCMKTS:FFWC) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, earnings, risk, profitability, institutional ownership, dividends and valuation.

Dividends

First Capital pays an annual dividend of $1.24 per share and has a dividend yield of 2.3%. FFW pays an annual dividend of $1.24 per share and has a dividend yield of 2.5%. First Capital pays out 23.7% of its earnings in the form of a dividend. FFW pays out 21.4% 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 Capital has raised its dividend for 2 consecutive years. FFW is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility and Risk

First Capital has a beta of 0.68, indicating that its stock price is 32% less volatile than the S&P 500. Comparatively, FFW has a beta of -0.12, indicating that its stock price is 112% less volatile than the S&P 500.

Insider and Institutional Ownership

11.6% of First Capital shares are held by institutional investors. 4.1% of First Capital shares are held by insiders. Comparatively, 17.0% of FFW shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares First Capital and FFW’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Capital	26.03%	12.91%	1.39%
FFW	18.80%	N/A	N/A

Analyst Ratings

This is a summary of current recommendations and price targets for First Capital and FFW, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Capital	0	1	1	0	2.50
FFW	0	0	0	0	0.00

Earnings and Valuation

This table compares First Capital and FFW”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Capital	$52.65 million	3.47	$16.37 million	$5.23	10.43
FFW	$32.63 million	1.69	$5.54 million	$5.79	8.72

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

Summary

First Capital beats FFW on 12 of the 16 factors compared between the two stocks.

About First Capital

First Capital, Inc. operates as the bank holding company for First Harrison Bank that provides various banking services to individuals and business customers. The company offers various deposit instruments, including non-interest-bearing checking accounts, negotiable order of withdrawal accounts, money market accounts, regular savings accounts, certificates of deposit, and retirement savings plans. It also provides residential mortgage loans, construction loans for residential and commercial properties, and commercial real estate loans, as well as commercial business loans. In addition, the company originates mortgage loans for sale in the secondary market and sells non-deposit investment products; and offers various secured or guaranteed consumer loans comprising automobile and truck loans, home equity loans, home improvement loans, boat loans, mobile home loans, credit cards and other personal loans, and loans secured by savings deposits, as well as unsecured consumer loans. First Capital, Inc. was founded in 1891 and is based in Corydon, Indiana.

About FFW

FFW Corporation operates as the bank holding company for Crossroads Bank that provides various banking products and services. The company offers checking and savings accounts, overdraft protection, consumer credit cards, and reorder checks. Its loan products include home equity, auto, RV, boat, motorcycle, and personal loans; mortgage loans; agricultural loans; commercial real estate equipment financing; revolving lines of credit and standby letters of credit; and equipment leasing, as well as commercial lending services. The company offers insurance products, such as auto, home and property, business, life and health, and specialty insurance; investment products and securities; and digital banking services. FFW Corporation was founded in 1920 and is based in Wabash, Indiana.