Contrasting First Foundation (NASDAQ:FFWM) and Eagle Financial Services (OTCMKTS:EFSI)

First Foundation (NASDAQ:FFWM) and Eagle Financial Services (OTCMKTS:EFSI) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, dividends, institutional ownership and earnings.

Volatility and Risk

First Foundation has a beta of 1, suggesting that its share price has a similar volatility profile to the S&P 500.Comparatively, Eagle Financial Services has a beta of 0.26, suggesting that its share price is 74% less volatile than the S&P 500.

Dividends

First Foundation pays an annual dividend of $0.04 per share and has a dividend yield of 0.7%. Eagle Financial Services pays an annual dividend of $1.24 per share and has a dividend yield of 3.6%. First Foundation pays out -2.8% of its earnings in the form of a dividend. Eagle Financial Services pays out 57.4% 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.

Profitability

This table compares First Foundation and Eagle Financial Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Foundation	-13.94%	-0.73%	-0.05%
Eagle Financial Services	13.59%	10.92%	0.67%

Valuation and Earnings

This table compares First Foundation and Eagle Financial Services”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Foundation	$66.26 million	7.01	-$92.41 million	($1.41)	-4.00
Eagle Financial Services	$54.73 million	3.43	$15.34 million	$2.16	16.16

Eagle Financial Services has lower revenue, but higher earnings than First Foundation. First Foundation is trading at a lower price-to-earnings ratio than Eagle Financial Services, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

73.1% of First Foundation shares are owned by institutional investors. Comparatively, 0.3% of Eagle Financial Services shares are owned by institutional investors. 9.5% of First Foundation shares are owned by insiders. Comparatively, 8.7% of Eagle Financial Services shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent recommendations for First Foundation and Eagle Financial Services, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Foundation	0	2	1	0	2.33
Eagle Financial Services	0	0	0	0	0.00

First Foundation currently has a consensus price target of $6.25, indicating a potential upside of 10.91%. Given First Foundation’s stronger consensus rating and higher probable upside, equities analysts plainly believe First Foundation is more favorable than Eagle Financial Services.

Summary

First Foundation beats Eagle Financial Services on 9 of the 16 factors compared between the two stocks.

About First Foundation

First Foundation Inc., through its subsidiaries, provides banking services, investment advisory, wealth management, and trust services to individuals, businesses, and other organizations in the United States. The company operates in two segments, Banking and Wealth Management. It offers a range of deposit products, including personal and business checking accounts, savings accounts, interest-bearing demand deposit accounts, money market accounts, and time certificate of deposits; and loan products consisting of multifamily and single family residential real estate loans, commercial real estate loans, commercial term loans, and line of credits, as well as consumer loans, such as personal installment loans and line of credits, and home equity line of credits. The company also provides various specialized services comprising trust services, online and mobile banking, remote deposit capture services, merchant credit card services, ATM cards, Visa debit cards, and business sweep accounts, as well as insurance brokerage services and equipment financing solutions. In addition, it offers investment management and financial planning services; financial, investment, and economic advisory and related services; and treasury management services, such as bill pay, check/payee/ACH positive pay, wire origination, internal and external transfers, account reconciliation reporting, mobile deposit, lockbox, cash vault services and merchant processing. Further, the company provides support services, including the processing and transmission of financial and economic data for charitable organizations. It operates through a network of branch offices and loan production offices. The company was founded in 1985 and is headquartered in Dallas, Texas.

About Eagle Financial Services

Eagle Financial Services, Inc. operates as the bank holding company for Bank of Clarke that provides various retail and commercial banking products and services in the Shenandoah Valley, Northern Virginia and Frederick, Maryland. It operates through three segments: Community Banking, Marine Lending, and Wealth Management. The company's deposit products include checking, NOW, money market, and regular savings accounts; and demand and time deposits. Its loan portfolio comprises one-to-four-family residential real estate, commercial real estate, construction and land development, and commercial and industrial loans, as well as secured and unsecured consumer loans, which include personal installment loans, personal lines of credit, automobile loans, and credit card loans. The company also offers fiduciary services; advisory services and investment products, including individual retirement accounts, mutual funds, tax-deferred annuities, 529 college savings plans, life insurance, long term care insurance, brokerage certificates of deposit, and other brokerage services; non-deposit investment products; and title insurance products. In addition, it provides ATM and debit cards; online bill payment services; wealth management services; and telephone, internet, and mobile banking services, as well as other commercial deposit account services, such as ACH origination and remote deposit capture services. The company operates through full-service branches, loan production offices, drive-through only facility, and ATM locations in the Virginia communities of Berryville, Winchester, Boyce, Stephens City, Purcellville, Warrenton, Leesburg, Ashburn, and Fairfax, as well as Maryland community of Frederick. Eagle Financial Services, Inc. was founded in 1881 and is headquartered in Berryville, Virginia.