Head to Head Analysis: Wintrust Financial (NASDAQ:WTFC) and First Community Bancshares (NASDAQ:FCBC)

First Community Bancshares (NASDAQ:FCBC) and Wintrust Financial (NASDAQ:WTFC) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, earnings, institutional ownership, dividends, profitability, risk and valuation.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
First Community Bancshares	28.84%	10.67%	1.61%
Wintrust Financial	20.72%	13.37%	1.28%

Insider and Institutional Ownership

35.0% of First Community Bancshares shares are owned by institutional investors. Comparatively, 93.5% of Wintrust Financial shares are owned by institutional investors. 3.7% of First Community Bancshares shares are owned by company insiders. Comparatively, 1.2% of Wintrust Financial shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Volatility & Risk

First Community Bancshares has a beta of 0.47, suggesting that its stock price is 53% less volatile than the S&P 500. Comparatively, Wintrust Financial has a beta of 0.84, suggesting that its stock price is 16% less volatile than the S&P 500.

Dividends

First Community Bancshares pays an annual dividend of $1.32 per share and has a dividend yield of 2.7%. Wintrust Financial pays an annual dividend of $2.20 per share and has a dividend yield of 1.4%. First Community Bancshares pays out 41.6% of its earnings in the form of a dividend. Wintrust Financial pays out 17.7% 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 Bancshares has raised its dividend for 13 consecutive years and Wintrust Financial has raised its dividend for 12 consecutive years. First Community Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares First Community Bancshares and Wintrust Financial”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Community Bancshares	$185.42 million	4.93	$48.79 million	$3.17	15.24
Wintrust Financial	$4.23 billion	2.44	$823.84 million	$12.45	12.31

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

Analyst Ratings

This is a summary of current recommendations for First Community Bancshares and Wintrust Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Community Bancshares	0	2	1	0	2.33
Wintrust Financial	0	4	9	0	2.69

Wintrust Financial has a consensus target price of $177.77, indicating a potential upside of 15.98%. Given Wintrust Financial’s stronger consensus rating and higher possible upside, analysts clearly believe Wintrust Financial is more favorable than First Community Bancshares.

Summary

Wintrust Financial beats First Community Bancshares on 10 of the 17 factors compared between the two stocks.

About First Community Bancshares

First Community Bankshares, Inc. operates as the financial holding company for First Community Bank that provides various banking products and services. It offers demand deposit accounts, savings and money market accounts, certificates of deposit, and individual retirement plans; and commercial, consumer real estate, and consumer and other loans. The company also provides trust management, estate administration, and investment advisory services; and investment management services. It serves individuals and businesses across various industries, such as education, government, and health services; coal mining and gas extraction; retail trade; construction; manufacturing; tourism; and transportation. The company operates through branches in West Virginia, Virginia, North Carolina, and Tennessee. Community Bankshares, Inc. was founded in 1874 and is headquartered in Bluefield, Virginia.

About Wintrust Financial

Wintrust Financial Corporation operates as a financial holding company. It operates in three segments: Community Banking, Specialty Finance, and Wealth Management. The Community Banking segment offers non-interest bearing deposits, non-brokered interest-bearing transaction accounts, and savings and domestic time deposits; home equity, consumer, and real estate loans; safe deposit facilities; and automatic teller machine (ATM), online and mobile banking, and other services. It also engages in the retail origination and purchase of residential mortgages; and provision of lending, deposits, and treasury management services to condominium, homeowner, and community associations, as well as asset-based lending for middle-market companies. In addition, this segment offers loan and deposit services to mortgage brokerage companies; lending to restaurant franchisees; direct leasing; small business administration loans; commercial mortgages and construction loans; and financial solutions. It provides personal and commercial banking services primarily to individuals, small to mid-sized businesses, local governmental units, and institutional clients. The Specialty Finance segment offers commercial and life insurance premiums financing for businesses and individuals; accounts receivable financing, value-added, and out-sourced administrative services; other specialty finance services; equipment financing through structured loan and lease products; and property and casualty premium financing; as well as data processing of payrolls, billing, and cash management services to temporary staffing industry. The Wealth Management segment provides wealth management services, such as trust and investment, asset management, tax-deferred exchange, securities brokerage, and retirement plan services. Wintrust Financial Corporation was founded in 1991 and is headquartered in Rosemont, Illinois.