Comparing BayFirst Financial (NASDAQ:BAFN) and First National (NASDAQ:FXNC)

First National (NASDAQ:FXNC) and BayFirst Financial (NASDAQ:BAFN) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, institutional ownership, profitability, analyst recommendations, risk, valuation and dividends.

Institutional and Insider Ownership

33.9% of First National shares are held by institutional investors. Comparatively, 16.9% of BayFirst Financial shares are held by institutional investors. 14.3% of First National shares are held by insiders. Comparatively, 18.8% of BayFirst Financial shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and recommmendations for First National and BayFirst Financial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First National	0	2	0	0	2.00
BayFirst Financial	1	0	0	0	1.00

First National presently has a consensus target price of $28.50, suggesting a potential upside of 11.94%. Given First National’s stronger consensus rating and higher probable upside, research analysts plainly believe First National is more favorable than BayFirst Financial.

Valuation & Earnings

This table compares First National and BayFirst Financial”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First National	$92.70 million	2.47	$6.97 million	$1.26	20.21
BayFirst Financial	$143.28 million	0.23	$12.60 million	($3.11)	-2.53

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

Profitability

This table compares First National and BayFirst Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First National	9.53%	11.34%	0.96%
BayFirst Financial	-8.08%	-12.02%	-0.81%

Risk and Volatility

First National has a beta of 0.51, suggesting that its stock price is 49% less volatile than the S&P 500. Comparatively, BayFirst Financial has a beta of 0.39, suggesting that its stock price is 61% less volatile than the S&P 500.

Summary

First National beats BayFirst Financial on 10 of the 13 factors compared between the two stocks.

About First National

First National Corporation operates as the bank holding company for First Bank that provides various commercial banking services to small and medium-sized businesses, individuals, estates, local governmental entities, and non-profit organizations in Virginia. The company's deposit products include checking, savings, money market, and individual retirement accounts, as well as certificates of deposit and treasury management solutions. Its loan products comprise construction loans, including residential, land acquisition, and development loans; 1-4 family residential real estate loans; and commercial real estate loans that are secured by commercial real estate, including multi-family residential buildings, office and retail buildings, hotels, industrial buildings, and religious facilities. In addition, the company's loan products include commercial and industrial loans that are secured by business assets, such as accounts receivable, equipment, and inventory; home equity loans; and secured and unsecured consumer loans, such as lines of credit, automobile loans, deposit account loans, and installment and demand loans. Further, it provides wealth management services, including estate planning, investment management of assets, trustee under an agreement, trustee under a will, and estate settlement. Additionally, the company offers title insurance and investment services; and holds other real estate owned and office sites, as well as provides internet and mobile banking, remote deposit capture, and other traditional banking services. First National Corporation was founded in 1907 and is headquartered in Strasburg, Virginia.

About BayFirst Financial

BayFirst Financial Corp. operates as the bank holding company for BayFirst National Bank that provides community banking services for businesses and individuals. The company offers checking, savings, NOW, and money market deposit accounts, as well as certificates of deposit and individual retirement account; and safety deposit boxes. It also provides commercial real estate mortgages; construction and development, working capital, and business loans; auto, boat, and recreational vehicle loans; and residential mortgages, personal lines of credit, and home equity lines of credit. In addition, the company offers mobile and online banking, treasury management, wire transfers, cash management, merchant processing, remote deposit capture, night depositor, online bill payment, courier, retail investment, ACH originations, and other services. It operates full-service banking centers in St. Petersburg, Seminole, Pinellas Park, Clearwater, Sarasota, Tampa, Belleair Bluffs, and Bradenton, Florida. The company was formerly known as First Home Bancorp, Inc. and changed its name to BayFirst Financial Corp. in May 2021. BayFirst Financial Corp. was founded in 1999 and is headquartered in St. Petersburg, Florida.