Reviewing First Bancorp (FBNC) & Royal Bank of Scotland Group (RBS)

First Bancorp (NASDAQ: FBNC) and Royal Bank of Scotland Group (NYSE:RBS) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, profitability, earnings, dividends and valuation.

Institutional & Insider Ownership

56.7% of First Bancorp shares are held by institutional investors. Comparatively, 0.5% of Royal Bank of Scotland Group shares are held by institutional investors. 2.4% of First Bancorp shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Valuation & Earnings

This table compares First Bancorp and Royal Bank of Scotland Group’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First Bancorp $226.29 million 4.72 $45.97 million $1.80 20.01
Royal Bank of Scotland Group $20.53 billion 2.29 -$7.13 billion ($0.74) -10.64

First Bancorp has higher earnings, but lower revenue than Royal Bank of Scotland Group. Royal Bank of Scotland Group is trading at a lower price-to-earnings ratio than First Bancorp, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares First Bancorp and Royal Bank of Scotland Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
First Bancorp 20.32% 9.24% 1.02%
Royal Bank of Scotland Group -17.46% 7.75% 0.49%

Analyst Ratings

This is a breakdown of recent ratings and price targets for First Bancorp and Royal Bank of Scotland Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Bancorp 0 1 3 0 2.75
Royal Bank of Scotland Group 0 9 6 0 2.40

First Bancorp currently has a consensus target price of $39.33, indicating a potential upside of 9.20%. Given First Bancorp’s stronger consensus rating and higher possible upside, analysts clearly believe First Bancorp is more favorable than Royal Bank of Scotland Group.

Risk & Volatility

First Bancorp has a beta of 1.12, meaning that its stock price is 12% more volatile than the S&P 500. Comparatively, Royal Bank of Scotland Group has a beta of 1.2, meaning that its stock price is 20% more volatile than the S&P 500.

Dividends

First Bancorp pays an annual dividend of $0.32 per share and has a dividend yield of 0.9%. Royal Bank of Scotland Group does not pay a dividend. First Bancorp pays out 17.8% of its earnings in the form of a dividend.

Summary

First Bancorp beats Royal Bank of Scotland Group on 12 of the 16 factors compared between the two stocks.

First Bancorp Company Profile

First Bancorp is the bank holding company for First Bank (the Bank). The Company’s principal activity is the ownership and operation of First Bank. The Bank engages in a range of banking activities, including the acceptance of deposits and the making of loans. The Bank offers credit cards, debit cards, letters of credit, safe deposit box rentals and electronic funds transfer services, including wire transfers. In addition, the Bank offers Internet banking, mobile banking, cash management and bank-by-phone capabilities to its customers. It also offers a mobile check deposit feature for its mobile banking customers to deposit checks through their smartphone. The Bank offers remote deposit capture for its business customers. The Company provides loans for a range of consumer and commercial purposes, including loans for business, agriculture, real estate, personal uses, home improvement and automobiles.

Royal Bank of Scotland Group Company Profile

The Royal Bank of Scotland Group plc (RBS) is a banking and financial services company. The Company provides a range of products and services to personal, commercial, corporate and institutional customers, through its subsidiaries, The Royal Bank of Scotland plc and National Westminster Bank Plc (NatWest), as well as through other brands, including Ulster Bank and Coutts. The Company’s segments include Personal & Business Banking (PBB), Commercial & Private Banking (CPB), NatWest Markets (NWM), Capital Resolution, Williams & Glyn (W&G), and Central items & other. The Company’s products and services include banking and risk management, such as payments, insurance and liquidity management; personal lending, including personal loans and credit cards; deposits, such as current accounts and savings accounts; investments, such as portfolio management and unitized funds; commercial lending, including business lending, and capital markets, including rates, currencies and financing.

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