First National (NASDAQ:FXNC) vs. Luther Burbank (NASDAQ:LBC) Financial Contrast

Luther Burbank (NASDAQ:LBC) and First National (NASDAQ:FXNC) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, valuation, institutional ownership, risk, profitability, earnings and analyst recommendations.

Profitability

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

Net Margins Return on Equity Return on Assets
Luther Burbank 17.18% 7.21% 0.62%
First National 20.30% 10.56% 0.96%

Earnings and Valuation

This table compares Luther Burbank and First National’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Luther Burbank $271.82 million 2.23 $48.86 million $0.87 13.31
First National $41.45 million 2.15 $9.56 million N/A N/A

Luther Burbank has higher revenue and earnings than First National.

Dividends

Luther Burbank pays an annual dividend of $0.23 per share and has a dividend yield of 2.0%. First National pays an annual dividend of $0.48 per share and has a dividend yield of 2.6%. Luther Burbank pays out 26.4% of its earnings in the form of a dividend. Luther Burbank has increased its dividend for 1 consecutive years and First National has increased its dividend for 1 consecutive years.

Volatility & Risk

Luther Burbank has a beta of 0.8, suggesting that its stock price is 20% less volatile than the S&P 500. Comparatively, First National has a beta of 0.6, suggesting that its stock price is 40% less volatile than the S&P 500.

Insider & Institutional Ownership

16.0% of Luther Burbank shares are owned by institutional investors. Comparatively, 23.1% of First National shares are owned by institutional investors. 21.1% of Luther Burbank shares are owned by company insiders. Comparatively, 10.9% of First National shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations for Luther Burbank and First National, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Luther Burbank 0 1 0 0 2.00
First National 0 0 0 0 N/A

Luther Burbank presently has a consensus target price of $9.50, indicating a potential downside of 17.96%. Given Luther Burbank’s higher possible upside, equities research analysts clearly believe Luther Burbank is more favorable than First National.

Summary

Luther Burbank beats First National on 7 of the 13 factors compared between the two stocks.

Luther Burbank Company Profile

Luther Burbank Corporation operates as the bank holding company for Luther Burbank Savings that provides various banking products and services for real estate investors, professionals, entrepreneurs, high net worth individuals, depositors, and commercial businesses. The company offers interest and noninterest-bearing transaction accounts, certificates of deposit, and money market accounts. It also provides commercial real estate loans, including first mortgage loans for the purchase, refinance, or build-out of tenant improvements on investor owned multifamily residential properties, as well as loans for the purchase, refinance, or improvement of office, retail, and light industrial properties; single family residential loans; and mortgage products, such as a portfolio of 30-year fixed rate first mortgage and a forgivable second mortgage. In addition, the company offers ATM, debit cards, and online and mobile banking services; engages in the real estate investment; and issues trust preferred securities. As of December 31, 2020, it had operations in California, Oregon, and Washington through 10 branches in California; 1 branch in Washington; and 7 lending offices located throughout the market area, including Santa Rosa, Los Angeles, San Francisco, San Jose, San Diego, and Seattle. The company was founded in 1983 and is headquartered in Santa Rosa, California.

First National Company Profile

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 various types of commercial real estate, including multi-family residential buildings, office and retail buildings, hotels, industrial buildings, and religious facilities. The company's loan products also 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. In addition, it provides wealth management services, including estate planning, investment management of assets, trustee under an agreement, trustee under a will, and estate settlement. Further, 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. It serves customers through 14 bank branch offices, a loan production office, and a customer service center, as well as through a network of ATMs. The company was founded in 1907 and is headquartered in Strasburg, Virginia.

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