Comparing First National (NASDAQ:FXNC) and Five Star Bancorp (NASDAQ:FSBC)

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

Risk and Volatility

Five Star Bancorp has a beta of 0.42, meaning that its stock price is 58% less volatile than the S&P 500. Comparatively, First National has a beta of 0.52, meaning that its stock price is 48% less volatile than the S&P 500.

Dividends

Five Star Bancorp pays an annual dividend of $0.80 per share and has a dividend yield of 2.6%. First National pays an annual dividend of $0.60 per share and has a dividend yield of 3.4%. Five Star Bancorp pays out 30.4% 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Five Star Bancorp	22.24%	14.03%	1.22%
First National	10.40%	7.29%	0.60%

Valuation & Earnings

This table compares Five Star Bancorp and First National”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Five Star Bancorp	$115.51 million	5.69	$47.73 million	$2.63	11.73
First National	$55.16 million	2.02	$9.62 million	$1.43	12.41

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

Analyst Recommendations

This is a breakdown of current ratings and target prices for Five Star Bancorp and First National, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Five Star Bancorp	0	1	2	0	2.67
First National	0	0	1	0	3.00

Five Star Bancorp currently has a consensus target price of $32.33, indicating a potential upside of 4.81%. First National has a consensus target price of $21.00, indicating a potential upside of 18.31%. Given First National’s stronger consensus rating and higher possible upside, analysts plainly believe First National is more favorable than Five Star Bancorp.

Insider & Institutional Ownership

46.9% of Five Star Bancorp shares are owned by institutional investors. Comparatively, 33.9% of First National shares are owned by institutional investors. 25.6% of Five Star Bancorp shares are owned by insiders. Comparatively, 16.5% of First National shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

Five Star Bancorp beats First National on 11 of the 16 factors compared between the two stocks.

About Five Star Bancorp

Five Star Bancorp operates as the bank holding company for Five Star Bank that provides a range of banking products and services to small and medium-sized businesses, professionals, and individuals in Northern California. It accepts various deposits, such as money market accounts, noninterest-bearing and interest checking accounts, savings accounts, term certificate accounts, and time deposits. The company also offers loan products, including commercial and residential real estate loans; commercial loans; commercial land loans; farmland loans; commercial and residential construction loans; and consumer and other loans, as well as operating lines of credit. In addition, it provides debit cards; and remote deposit capture, online and mobile banking, and direct deposit services. Five Star Bancorp was founded in 1999 and is headquartered in Rancho Cordova, California.

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.