Analyzing National Commerce (NASDAQ:NCOM) and American National BankShares (AMNB)

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National Commerce (NASDAQ:NCOM) and American National BankShares (NASDAQ:AMNB) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, dividends, profitability, risk and valuation.

Dividends

American National BankShares pays an annual dividend of $1.00 per share and has a dividend yield of 2.9%. National Commerce does not pay a dividend. American National BankShares pays out 37.2% of its earnings in the form of a dividend. American National BankShares has increased its dividend for 3 consecutive years.

Risk & Volatility

National Commerce has a beta of 1.23, meaning that its stock price is 23% more volatile than the S&P 500. Comparatively, American National BankShares has a beta of 0.87, meaning that its stock price is 13% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and target prices for National Commerce and American National BankShares, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
National Commerce 0 2 1 0 2.33
American National BankShares 0 0 2 0 3.00

National Commerce currently has a consensus price target of $42.00, indicating a potential upside of 0.00%. American National BankShares has a consensus price target of $40.50, indicating a potential upside of 19.05%. Given American National BankShares’ stronger consensus rating and higher possible upside, analysts plainly believe American National BankShares is more favorable than National Commerce.

Earnings & Valuation

This table compares National Commerce and American National BankShares’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
National Commerce $190.94 million 4.57 $42.44 million $2.49 16.87
American National BankShares $82.04 million 3.62 $22.58 million $2.69 12.65

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

Insider & Institutional Ownership

50.6% of National Commerce shares are held by institutional investors. Comparatively, 34.6% of American National BankShares shares are held by institutional investors. 14.2% of National Commerce shares are held by insiders. Comparatively, 5.9% of American National BankShares shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares National Commerce and American National BankShares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
National Commerce 22.22% 8.32% 1.36%
American National BankShares 27.52% 11.01% 1.29%

Summary

National Commerce beats American National BankShares on 9 of the 17 factors compared between the two stocks.

About National Commerce

National Commerce Corporation operates as the bank holding company for National Bank of Commerce that provides various financial services to businesses, business owners, and professionals. The company offers deposit products, including interest and noninterest-bearing demand deposits, money market accounts, interest-bearing transaction accounts, savings and time deposits, checking accounts, and certificates of deposit, as well as negotiable orders of withdrawal accounts. It also provides real estate loans, such as commercial real estate term, residential mortgage, and construction and land development loans, as well as home equity lines of credit secured by residential property; commercial and industrial loans; and consumer loans to purchase automobiles and other consumer durable goods. In addition, the company provides factoring, invoicing, collection, and accounts receivable management services to transportation companies, and automotive parts and service providers; and electronic banking services, including commercial and retail online banking, automated bill payment, mobile banking, and remote deposit capture. The company offers its services through 7 full-service banking offices in Birmingham, Huntsville, Auburn-Opelika, and Baldwin County, Alabama; 21 full-service banking offices in central and northeast Florida, including United Legacy Bank, Reunion Bank of Florida, Patriot Bank, and FirstAtlantic Bank names; and 2 full-service banking offices and a loan production office in Atlanta, Georgia. National Commerce Corporation was founded in 2004 and is headquartered in Birmingham, Alabama.

About American National BankShares

American National Bankshares Inc. operates as the bank holding company for American National Bank and Trust Company that provides financial products and services. The company operates through two segments, Community Banking, and Trust and Investment Services. It accepts deposit products, including checking, money market, savings, and consumer and commercial time deposits, as well as certificates of deposit. The company's loan products comprise commercial and residential real estate loans, commercial loans to small and medium-sized businesses, construction and land development loans, home equity loans, and consumer loans. It also offers trust and investment services, such as estate planning, trust account administration, investment management, and retail brokerage services; online and telephone banking services; insurance services; and investment management services, including purchasing equity, fixed income, and mutual fund investments for customer accounts, as well as operates 34 automated teller machines. As of February 21, 2018, it operated 26 banking offices and 2 loan production offices in Virginia and North Carolina. American National Bankshares Inc. was founded in 1909 and is headquartered in Danville, Virginia.

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