Reviewing First National (NASDAQ:FXNC) and Red River Bancshares (NASDAQ:RRBI)

First National (NASDAQ:FXNC) and Red River Bancshares (NASDAQ:RRBI) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, dividends, valuation, institutional ownership, profitability, risk and analyst recommendations.

Insider and Institutional Ownership

33.9% of First National shares are owned by institutional investors. Comparatively, 27.6% of Red River Bancshares shares are owned by institutional investors. 16.5% of First National shares are owned by company insiders. Comparatively, 16.4% of Red River Bancshares shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares First National and Red River Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First National	10.40%	7.29%	0.60%
Red River Bancshares	21.56%	10.90%	1.06%

Valuation & Earnings

This table compares First National and Red River Bancshares”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First National	$55.16 million	2.09	$9.62 million	$1.43	12.85
Red River Bancshares	$149.60 million	2.31	$34.88 million	$4.69	10.69

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

Dividends

First National pays an annual dividend of $0.60 per share and has a dividend yield of 3.3%. Red River Bancshares pays an annual dividend of $0.36 per share and has a dividend yield of 0.7%. First National pays out 42.0% of its earnings in the form of a dividend. Red River Bancshares pays out 7.7% 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.

Volatility and Risk

First National has a beta of 0.52, meaning that its stock price is 48% less volatile than the S&P 500. Comparatively, Red River Bancshares has a beta of 0.61, meaning that its stock price is 39% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations and price targets for First National and Red River Bancshares, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First National	0	0	1	0	3.00
Red River Bancshares	0	0	1	0	3.00

First National presently has a consensus target price of $21.00, suggesting a potential upside of 14.32%. Red River Bancshares has a consensus target price of $55.00, suggesting a potential upside of 9.67%. Given First National’s higher probable upside, research analysts plainly believe First National is more favorable than Red River Bancshares.

Summary

Red River Bancshares beats First National on 9 of the 14 factors compared between the two stocks.

About First National

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.

About Red River Bancshares

Red River Bancshares, Inc. operates as a bank holding company for Red River Bank that provides banking products and services to commercial and retail customers in Louisiana. The company provides various deposit products, including checking, saving, money market accounts, and time deposits. It offers commercial real estate loans; one-to-four family mortgage loans and home equity lines of credit; construction and development loans; commercial and industrial loans; small business administration paycheck protection program loans; tax-exempt loans; consumer loans to individuals for personal, family, and household purposes, including secured and unsecured installment and term loans; home mortgage loans; and lines of credit and standby letters of credit. In addition, the company provides treasury management, private banking, and brokerage; investment advisory, financial planning, and a suite of retirement plans; debit and credit cards, direct deposits, cashier's checks, and wire transfer services; online banking services, including access to account balances, online transfers, online bill payment, and electronic delivery of customer statements; and banking services in person, through ATMs, drive-through facilities, night deposits, telephone, mail, mobile banking, and remote deposits. Red River Bancshares, Inc. was incorporated in 1998 and is headquartered in Alexandria, Louisiana.