Financial Contrast: First National (NASDAQ:FXNC) versus Cambridge Bancorp (NASDAQ:CATC)

Cambridge Bancorp (NASDAQ:CATCGet Free Report) and First National (NASDAQ:FXNCGet Free Report) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, dividends, valuation, profitability, institutional ownership, risk and analyst recommendations.

Dividends

Cambridge Bancorp pays an annual dividend of $2.68 per share and has a dividend yield of 3.9%. First National pays an annual dividend of $0.60 per share and has a dividend yield of 3.9%. Cambridge Bancorp pays out 73.8% of its earnings in the form of a dividend. First National pays out 42.0% 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. Cambridge Bancorp has increased its dividend for 25 consecutive years. First National is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Cambridge Bancorp and First National, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cambridge Bancorp 0 1 1 0 2.50
First National 0 1 0 0 2.00

Cambridge Bancorp currently has a consensus target price of $73.15, indicating a potential upside of 6.01%. First National has a consensus target price of $19.00, indicating a potential upside of 25.08%. Given First National’s higher probable upside, analysts plainly believe First National is more favorable than Cambridge Bancorp.

Profitability

This table compares Cambridge Bancorp and First National’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cambridge Bancorp 10.11% 6.67% 0.65%
First National 12.21% 7.83% 0.64%

Valuation & Earnings

This table compares Cambridge Bancorp and First National’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cambridge Bancorp $260.26 million 2.08 $34.11 million $3.63 19.01
First National $69.50 million 1.37 $9.62 million $1.43 10.62

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

Risk & Volatility

Cambridge Bancorp has a beta of 0.63, indicating that its share price is 37% less volatile than the S&P 500. Comparatively, First National has a beta of 0.51, indicating that its share price is 49% less volatile than the S&P 500.

Institutional & Insider Ownership

55.5% of Cambridge Bancorp shares are owned by institutional investors. Comparatively, 33.9% of First National shares are owned by institutional investors. 4.5% of Cambridge Bancorp shares are owned by company insiders. Comparatively, 16.5% of First National shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Cambridge Bancorp beats First National on 11 of the 17 factors compared between the two stocks.

About Cambridge Bancorp

(Get Free Report)

Cambridge Bancorp operates as the bank holding company for Cambridge Trust Company that engages in the provision of commercial and consumer banking, and investment management and trust services. The company accepts various deposits, such as checking, savings, money market, trust, and individual retirement accounts, as well as time and demand deposits, and certificates of deposit. Its loan products include residential and commercial real estate loans; construction loan; residential mortgages and home equity loans; commercial and industrial loans; consumer loans, such as secured and unsecured loans, lines of credit, and personal installment loans; and construction loans. The company also offers cash management, debit and credit cards, online and mobile banking, and payments services. It serves commercial enterprises, non-profit organizations, and individuals. The company operates through a network of banking and wealth management offices located in Massachusetts and New Hampshire. Cambridge Bancorp was founded in 1890 and is headquartered in Cambridge, Massachusetts.

About First National

(Get Free Report)

First National Corporation operates as the bank holding company for First Bank that provides various commercial banking services to small and medium-sized businesses, individuals, estates, local governmental entities, and non-profit organizations in Virginia. The company's deposit products include checking, savings, money market, and individual retirement accounts, as well as certificates of deposit and treasury management solutions. Its loan products comprise construction loans, including residential, land acquisition, and development loans; 1-4 family residential real estate loans; and commercial real estate loans that are secured by commercial real estate, including multi-family residential buildings, office and retail buildings, hotels, industrial buildings, and religious facilities. In addition, the company's loan products include commercial and industrial loans that are secured by business assets, such as accounts receivable, equipment, and inventory; home equity loans; and secured and unsecured consumer loans, such as lines of credit, automobile loans, deposit account loans, and installment and demand loans. Further, it provides wealth management services, including estate planning, investment management of assets, trustee under an agreement, trustee under a will, and estate settlement. Additionally, the company offers title insurance and investment services; and holds other real estate owned and office sites, as well as provides internet and mobile banking, remote deposit capture, and other traditional banking services. First National Corporation was founded in 1907 and is headquartered in Strasburg, Virginia.

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