Contrasting First Capital (NASDAQ:FCAP) & NewtekOne (NASDAQ:NEWT)

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

Valuation & Earnings

This table compares First Capital and NewtekOne”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Capital	$65.31 million	3.20	$16.37 million	$5.72	10.94
NewtekOne	$383.33 million	0.81	$60.51 million	$2.22	4.85

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
First Capital	27.14%	13.67%	1.49%
NewtekOne	13.58%	15.72%	1.91%

Insider and Institutional Ownership

11.7% of First Capital shares are owned by institutional investors. Comparatively, 38.4% of NewtekOne shares are owned by institutional investors. 4.1% of First Capital shares are owned by insiders. Comparatively, 5.9% of NewtekOne shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Dividends

First Capital pays an annual dividend of $1.28 per share and has a dividend yield of 2.0%. NewtekOne pays an annual dividend of $0.76 per share and has a dividend yield of 7.1%. First Capital pays out 22.4% of its earnings in the form of a dividend. NewtekOne pays out 34.2% 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 increased its dividend for 2 consecutive years and NewtekOne has increased its dividend for 1 consecutive years.

Risk & Volatility

First Capital has a beta of 0.71, meaning that its stock price is 29% less volatile than the S&P 500. Comparatively, NewtekOne has a beta of 1.3, meaning that its stock price is 30% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for First Capital and NewtekOne, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Capital	0	0	2	0	3.00
NewtekOne	1	4	1	0	2.00

NewtekOne has a consensus target price of $15.33, suggesting a potential upside of 42.50%. Given NewtekOne’s higher probable upside, analysts plainly believe NewtekOne is more favorable than First Capital.

Summary

NewtekOne beats First Capital on 9 of the 17 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 NewtekOne

NewtekOne, Inc. operates as the bank holding company for Newtek Bank, National Association that engages in the provision of various business and financial solutions under the Newtek brand name to the small- and medium-sized business market. The company accepts demand, savings, NOW, money market, and time deposits; and provides loans including SBA loans, commercial and industrial loans, and commercial real estate loans. It is also involved in the provision of electronic payment processing services comprising credit and debit card processing services, check approval services, processing equipment, and software, as well as cloud-based Point of Sale systems for a various restaurant, retail, assisted living, taxi cabs, parks, and golf course businesses. In addition, it offers wholesale brokerage insurance agency services; and payroll management, and related payment and tax reporting services to independent business owners. Further, the company provides website hosting, dedicated server hosting, cloud hosting, web design and development, internet marketing, ecommerce, data storage, backup and disaster recovery, and other related services, including consulting and implementing technology solutions for enterprise and commercial clients as well as SMBs. The company was formerly known as Newtek Business Services Corp. and changed its name to NewtekOne, Inc. in January 2023. NewtekOne, Inc. was founded in 1998 and is headquartered in Boca Raton, Florida.