National Bankshares (NASDAQ:NKSH) and Capital One Financial (NYSE:COF) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, risk, dividends, valuation and analyst recommendations.

Risk and Volatility

National Bankshares has a beta of 0.17, indicating that its stock price is 83% less volatile than the S&P 500. Comparatively, Capital One Financial has a beta of 1.28, indicating that its stock price is 28% more volatile than the S&P 500.

Insider and Institutional Ownership

36.5% of National Bankshares shares are owned by institutional investors. Comparatively, 88.4% of Capital One Financial shares are owned by institutional investors. 3.7% of National Bankshares shares are owned by company insiders. Comparatively, 1.7% of Capital One Financial shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares National Bankshares and Capital One Financial’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
National Bankshares $51.64 million 6.15 $14.09 million N/A N/A
Capital One Financial $30.00 billion 1.44 $1.98 billion $7.79 11.60

Capital One Financial has higher revenue and earnings than National Bankshares.

Analyst Ratings

This is a breakdown of current recommendations and price targets for National Bankshares and Capital One Financial, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
National Bankshares 0 0 2 0 3.00
Capital One Financial 0 6 13 0 2.68

National Bankshares currently has a consensus price target of $49.00, indicating a potential upside of 7.39%. Capital One Financial has a consensus price target of $111.32, indicating a potential upside of 23.21%. Given Capital One Financial’s higher possible upside, analysts clearly believe Capital One Financial is more favorable than National Bankshares.

Profitability

This table compares National Bankshares and Capital One Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
National Bankshares 27.73% 8.50% 1.26%
Capital One Financial 10.73% 10.44% 1.42%

Dividends

National Bankshares pays an annual dividend of $1.16 per share and has a dividend yield of 2.5%. Capital One Financial pays an annual dividend of $1.60 per share and has a dividend yield of 1.8%. Capital One Financial pays out 20.5% of its earnings in the form of a dividend. National Bankshares has increased its dividend for 16 consecutive years. National Bankshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

About National Bankshares

National Bankshares, Inc. operates as the bank holding company for the National Bank of Blacksburg that provides retail and commercial banking 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 deposits, 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 merchant credit card services, and business and consumer debit and credit cards; letters of credit, night depository, safe deposit boxes, utility payment services, and automatic funds transfer; wealth management, trust, and estate services for individual and business customers; non-deposit investment and insurance products; and telephone and Internet banking services. As of February 22, 2018, it operated 25 full service offices and a loan production office in Southwest Virginia. National Bankshares, Inc. was founded in 1891 and is headquartered in Blacksburg, Virginia.

About Capital One Financial

Capital One Financial Corporation operates as the bank holding company for the Capital One Bank (USA), National Association; and Capital One, National Association, which provides various financial products and services in the United States, the United Kingdom, and Canada. It operates through three segments: Credit Card, Consumer Banking, and Commercial Banking. The company offers non-interest-bearing and interest-bearing deposits, such as checking accounts, money market deposit accounts, negotiable order of withdrawals, savings deposits, and time deposits. It also provides credit card loans; auto, home, and retail banking loans; and commercial and multifamily real estate, commercial and industrial, and small-ticket commercial real estate loans. In addition, the company offers credit and debit card products; online direct banking services; and treasury management and depository services. It serves consumers, small businesses, and commercial clients through the Internet and mobile banking, as well as through Caf├ęs, ATMs, and branches located in New York, Louisiana, Texas, Maryland, Virginia, New Jersey, and the District of Columbia. Capital One Financial Corporation was founded in 1988 and is headquartered in McLean, Virginia.

Receive News & Ratings for National Bankshares Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for National Bankshares and related companies with MarketBeat.com's FREE daily email newsletter.