Financial Comparison: Banc of California (NYSE:BANC) and National Bankshares (NASDAQ:NKSH)

National Bankshares (NASDAQ:NKSH) and Banc of California (NYSE:BANC) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, profitability, analyst recommendations, institutional ownership, dividends, valuation and earnings.

Dividends

National Bankshares pays an annual dividend of $1.56 per share and has a dividend yield of 6.0%. Banc of California pays an annual dividend of $0.40 per share and has a dividend yield of 2.9%. National Bankshares pays out 114.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Banc of California pays out 61.5% of its earnings in the form of a dividend.

Insider and Institutional Ownership

29.7% of National Bankshares shares are held by institutional investors. Comparatively, 86.9% of Banc of California shares are held by institutional investors. 3.2% of National Bankshares shares are held by company insiders. Comparatively, 2.7% of Banc of California shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares National Bankshares and Banc of California”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
National Bankshares	$47.72 million	3.49	$7.62 million	$1.36	19.22
Banc of California	$990.55 million	2.21	$126.89 million	$0.65	21.22

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

Profitability

This table compares National Bankshares and Banc of California’s 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%
Banc of California	7.06%	6.20%	0.53%

Risk & Volatility

National Bankshares has a beta of 0.66, suggesting that its stock price is 34% less volatile than the S&P 500. Comparatively, Banc of California has a beta of 0.69, suggesting that its stock price is 31% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations for National Bankshares and Banc of California, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
National Bankshares	0	0	1	0	3.00
Banc of California	0	4	8	0	2.67

National Bankshares presently has a consensus target price of $38.00, suggesting a potential upside of 45.37%. Banc of California has a consensus target price of $17.25, suggesting a potential upside of 25.09%. Given National Bankshares’ stronger consensus rating and higher possible upside, equities analysts plainly believe National Bankshares is more favorable than Banc of California.

Summary

Banc of California beats National Bankshares on 9 of the 16 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 Banc of California

Banc of California, Inc. operates as the bank holding company for Banc of California that provides various banking products and services in California. The company offers deposit products, such as checking, savings, money market, demand, and time deposits; certificates of deposit; retirement accounts; and safe deposit boxes. It also provides real estate loans to professional developers and real estate investors for the acquisition, construction, refinancing, renovation, and on-going operation of commercial real estate properties; commercial real estate mortgage, residential real estate mortgage, and real estate construction and land loans; commercial loans and leases, such as equipment finance, other asset-based, venture capital, secured business, warehouse, and other lending services; small business administration loans; and consumer loans comprising personal, auto, and other loans, as well as home equity and revolving lines of credit. In addition, the company offers international banking, multi-state deposit, and asset and investment management services, as well as cash and treasury management services; and online, mobile, remote deposit, and telephone banking services. It serves small and middle-market businesses, venture capital firms, non-profit organizations, business owners, entrepreneurs, professionals, and high-net worth individuals. Banc of California, Inc. was founded in 1941 and is headquartered in Los Angeles, California.