Head-To-Head Review: Fvcbankcorp (NASDAQ:FVCB) & City (NASDAQ:CHCO)

Fvcbankcorp (NASDAQ:FVCB) and City (NASDAQ:CHCO) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, profitability, earnings, institutional ownership, risk, analyst recommendations and valuation.

Institutional & Insider Ownership

43.6% of Fvcbankcorp shares are held by institutional investors. Comparatively, 72.4% of City shares are held by institutional investors. 11.2% of Fvcbankcorp shares are held by company insiders. Comparatively, 1.8% of City shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Fvcbankcorp and City”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fvcbankcorp	$122.03 million	2.59	$22.06 million	$1.28	13.74
City	$398.98 million	4.74	$130.49 million	$9.08	14.76

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

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Fvcbankcorp and City, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fvcbankcorp	0	1	2	0	2.67
City	0	5	1	0	2.17

Fvcbankcorp presently has a consensus price target of $19.00, suggesting a potential upside of 8.05%. City has a consensus price target of $134.25, suggesting a potential upside of 0.17%. Given Fvcbankcorp’s stronger consensus rating and higher probable upside, research analysts clearly believe Fvcbankcorp is more favorable than City.

Volatility & Risk

Fvcbankcorp has a beta of 0.36, suggesting that its stock price is 64% less volatile than the S&P 500. Comparatively, City has a beta of 0.49, suggesting that its stock price is 51% less volatile than the S&P 500.

Profitability

This table compares Fvcbankcorp and City’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Fvcbankcorp	18.85%	9.22%	1.01%
City	32.72%	16.58%	1.96%

Dividends

Fvcbankcorp pays an annual dividend of $0.28 per share and has a dividend yield of 1.6%. City pays an annual dividend of $3.48 per share and has a dividend yield of 2.6%. Fvcbankcorp pays out 21.9% of its earnings in the form of a dividend. City pays out 38.3% 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. City has increased its dividend for 6 consecutive years. City is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

City beats Fvcbankcorp on 12 of the 17 factors compared between the two stocks.

About Fvcbankcorp

FVCBankcorp, Inc. operates as the bank holding company for FVCbank that provides various banking products and services in Virginia. It offers deposit products, including interest and noninterest-bearing transaction accounts, savings accounts, money market accounts, and certificates of deposit. The company also provides commercial real estate loans; commercial construction loans; commercial loans for various business purposes, such as for working capital, equipment purchases, lines of credit, and government contract financing; small business administration loans; asset-based loans and accounts receivable financing; home equity loans; and consumer loans. In addition, it offers business and consumer credit cards; merchant services; business insurance products; and online banking, remote deposit, and mobile banking services. The company serves commercial businesses, nonprofit organizations, professional service entities, and their respective owners and employees located in the greater Washington, D.C., and Baltimore metropolitan areas. It operates branch offices in Arlington, Virginia; the independent city of Manassas, Virginia; Reston, Fairfax County, Virginia; Springfield, Fairfax County in Virginia; and Montgomery County and Baltimore in Maryland, and Washington, D.C. FVCBankcorp, Inc. was founded in 2007 and is headquartered in Fairfax, Virginia.

About City

City Holding Company operates as a holding company for City National Bank of West Virginia that provides various banking, trust, and investment management, and other financial solutions in the United States. The company offers checking, savings, and money market accounts, as well as certificates of deposit and individual retirement accounts. It also provides commercial and industrial loans that consist of loans to corporate and other legal entity borrowers primarily in small to mid-size industrial and commercial companies; commercial real estate loans comprising commercial mortgages, which are secured by nonresidential and multi-family residential properties; residential real estate loans to consumers for the purchase or refinance of residence; first-priority home equity loans; home equity lines of credit; amortized home equity loans; consumer loans that are secured and unsecured by automobiles, boats, recreational vehicles, certificates of deposit, and other personal property; and demand deposit account overdrafts, as well as owner-occupied real estate and construction, land development, and lines of credit. In addition, the company offers mortgage banking services, including fixed and adjustable-rate mortgages, construction financing, land loans, production of conventional and government-insured mortgages, secondary marketing, and mortgage servicing. Further, it provides deposit services for commercial customers comprising treasury management, lockbox, and other cash management services; merchant credit card services; wealth management, trust, investment, and custodial services for commercial and individual customers; and corporate trust and institutional custody, financial and estate planning, and retirement plan services, as well as automated-teller-machine, interactive-teller-machine, mobile banking, interactive voice response systems, and credit and debit card services. City Holding Company was founded in 1957 and is headquartered in Charleston, West Virginia.