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

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

Insider & Institutional Ownership

33.9% of First National shares are owned by institutional investors. Comparatively, 46.9% of Five Star Bancorp shares are owned by institutional investors. 16.5% of First National shares are owned by insiders. Comparatively, 25.6% of Five Star Bancorp shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Risk & Volatility

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

Dividends

First National pays an annual dividend of $0.60 per share and has a dividend yield of 3.4%. Five Star Bancorp pays an annual dividend of $0.80 per share and has a dividend yield of 2.7%. First National pays out 42.0% of its earnings in the form of a dividend. Five Star Bancorp pays out 30.4% 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.

Analyst Recommendations

This is a summary of recent recommendations for First National and Five Star Bancorp, as provided by MarketBeat.

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

First National currently has a consensus price target of $21.00, suggesting a potential upside of 20.69%. Five Star Bancorp has a consensus price target of $32.33, suggesting a potential upside of 7.74%. Given First National’s stronger consensus rating and higher probable upside, analysts clearly believe First National is more favorable than Five Star Bancorp.

Earnings & Valuation

This table compares First National and Five Star Bancorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First National	$55.16 million	1.98	$9.62 million	$1.43	12.17
Five Star Bancorp	$115.51 million	5.54	$47.73 million	$2.63	11.41

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.

Profitability

This table compares First National and Five Star Bancorp’s 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%
Five Star Bancorp	22.24%	14.03%	1.22%

Summary

Five Star Bancorp beats First National on 11 of the 16 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 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.