First Bank vs First Community Which Is a Smarter Choice?

First Bank and First Community are two prominent banking institutions with publicly traded stocks that investors may consider for their portfolio. Established in different regions, First Bank focuses on traditional banking services while First Community offers more personalized customer service and community involvement. Both banks have strong financial performances and a history of shareholder dividends. Understanding the differences in their business models, geographic footprints, and growth strategies is essential for investors looking to make an informed decision between these two banking stocks.

First Bank or First Community?

When comparing First Bank and First Community, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between First Bank and First Community.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. First Bank has a dividend yield of 1.64%, while First Community has a dividend yield of 2.24%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. First Bank reports a 5-year dividend growth of 14.87% year and a payout ratio of 14.99%. On the other hand, First Community reports a 5-year dividend growth of 6.96% year and a payout ratio of 33.27%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with First Bank P/E ratio at 9.17 and First Community's P/E ratio at 15.19. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. First Bank P/B ratio is 0.92 while First Community's P/B ratio is -8.52.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, First Bank has seen a 5-year revenue growth of 0.36%, while First Community's is 0.25%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with First Bank's ROE at 10.37% and First Community's ROE at 13.80%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $14.56 for First Bank and $25.82 for First Community. Over the past year, First Bank's prices ranged from $11.20 to $15.87, with a yearly change of 41.70%. First Community's prices fluctuated between $15.40 and $26.48, with a yearly change of 71.95%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.