Financial Survey: Nicolet Bankshares (NYSE:NIC) and National Bankshares (NASDAQ:NKSH)

National Bankshares (NASDAQ:NKSH) and Nicolet Bankshares (NYSE:NIC) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, institutional ownership, dividends, risk, analyst recommendations, earnings and valuation.

Analyst Recommendations

This is a summary of current ratings and price targets for National Bankshares and Nicolet Bankshares, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
National Bankshares	0	0	1	0	3.00
Nicolet Bankshares	0	3	1	0	2.25

National Bankshares currently has a consensus price target of $38.00, indicating a potential upside of 46.10%. Nicolet Bankshares has a consensus price target of $119.00, indicating a potential upside of 8.48%. Given National Bankshares’ stronger consensus rating and higher possible upside, equities analysts clearly believe National Bankshares is more favorable than Nicolet Bankshares.

Valuation and Earnings

This table compares National Bankshares and Nicolet Bankshares”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
National Bankshares	$45.36 million	3.65	$7.62 million	$1.22	21.32
Nicolet Bankshares	$349.12 million	4.78	$124.06 million	$8.03	13.66

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

Dividends

National Bankshares pays an annual dividend of $1.56 per share and has a dividend yield of 6.0%. Nicolet Bankshares pays an annual dividend of $1.12 per share and has a dividend yield of 1.0%. National Bankshares pays out 127.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Nicolet Bankshares pays out 13.9% of its earnings in the form of a dividend.

Volatility & Risk

National Bankshares has a beta of 0.55, suggesting that its stock price is 45% less volatile than the S&P 500. Comparatively, Nicolet Bankshares has a beta of 0.76, suggesting that its stock price is 24% less volatile than the S&P 500.

Insider and Institutional Ownership

29.7% of National Bankshares shares are held by institutional investors. Comparatively, 43.1% of Nicolet Bankshares shares are held by institutional investors. 2.8% of National Bankshares shares are held by company insiders. Comparatively, 16.4% of Nicolet Bankshares shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares National Bankshares and Nicolet Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
National Bankshares	9.64%	5.00%	0.43%
Nicolet Bankshares	23.83%	10.95%	1.41%

Summary

Nicolet Bankshares beats National Bankshares on 11 of the 15 factors compared between the two stocks.

About National Bankshares

National Bankshares, Inc. operates as the bank holding company for the National Bank of Blacksburg that provides retail and commercial banking products and services to individuals, businesses, non-profits, and local governments. The company accepts interest-bearing and non-interest-bearing demand deposit accounts, money market deposit accounts, savings accounts, certificates of deposit, health savings accounts, and individual retirement accounts. Its loan products include commercial and agricultural, commercial real estate, residential real estate, home equity, and various consumer loan products, as well as loans for the construction of commercial and residential properties. The company also provides business and consumer debit and credit cards; letters of credit, night depository services, safe deposit boxes, utility payment services, and automatic funds transfer; wealth management, trust, and estate services; non-deposit investment and insurance products; and telephone, mobile, and Internet banking services. The company was founded in 1891 and is headquartered in Blacksburg, Virginia.

About Nicolet Bankshares

Nicolet Bankshares, Inc. operates as the bank holding company for Nicolet National Bank that provides banking products and services for businesses and individuals in Wisconsin and Michigan. The company accepts checking, savings, and money market accounts; various certificates of deposit; and individual retirement accounts. It also offers commercial loans, including commercial, industrial, and business loans and lines of credit; commercial real estate loans; agricultural (AG) production and AG real estate loans; commercial real estate investment real estate loans; construction and land development loans; residential real estate loans, such as residential first lien and junior lien mortgages, home equity loans, lines of credit, and residential construction loans; and consumer loans. In addition, the company provides cash management, international banking, personal brokerage, safe deposit boxes, and trust and fiduciary services, as well as wealth management and retirement plan services. Further, it offers mortgage refinancing; online services, such as commercial, retail, and trust online banking; automated bill payment, mobile banking deposits and account access, and remote deposit capture services; and other services consisting of wire transfers, debit cards, credit cards, pre-paid gift cards, direct deposits, and official bank checks, as well as facilitates crop insurance products. The company was formerly known as Green Bay Financial Corporation and changed its name to Nicolet Bankshares, Inc. in March 2002. The company was incorporated in 2000 and is headquartered in Green Bay, Wisconsin.