Analyzing Dime Community Bancshares (NASDAQ:DCOM) and First Bancorp (NASDAQ:FBNC)

First Bancorp (NASDAQ:FBNC) and Dime Community Bancshares (NASDAQ:DCOM) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, valuation, earnings, profitability, dividends, analyst recommendations and institutional ownership.

Insider and Institutional Ownership

68.4% of First Bancorp shares are held by institutional investors. Comparatively, 75.3% of Dime Community Bancshares shares are held by institutional investors. 3.7% of First Bancorp shares are held by company insiders. Comparatively, 7.1% of Dime Community Bancshares shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares First Bancorp and Dime Community Bancshares”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Bancorp	$365.95 million	6.03	$76.21 million	$2.38	22.36
Dime Community Bancshares	$646.19 million	2.17	$29.08 million	$1.14	28.05

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

Profitability

This table compares First Bancorp and Dime Community Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Bancorp	17.50%	9.61%	1.18%
Dime Community Bancshares	8.72%	7.81%	0.71%

Analyst Recommendations

This is a summary of current recommendations and price targets for First Bancorp and Dime Community Bancshares, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Bancorp	0	3	2	1	2.67
Dime Community Bancshares	1	2	3	0	2.33

First Bancorp currently has a consensus price target of $56.67, indicating a potential upside of 6.48%. Dime Community Bancshares has a consensus price target of $35.25, indicating a potential upside of 10.23%. Given Dime Community Bancshares’ higher possible upside, analysts plainly believe Dime Community Bancshares is more favorable than First Bancorp.

Dividends

First Bancorp pays an annual dividend of $0.92 per share and has a dividend yield of 1.7%. Dime Community Bancshares pays an annual dividend of $1.00 per share and has a dividend yield of 3.1%. First Bancorp pays out 38.7% of its earnings in the form of a dividend. Dime Community Bancshares pays out 87.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Dime Community Bancshares has raised its dividend for 2 consecutive years. Dime Community Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

First Bancorp has a beta of 0.9, meaning that its stock price is 10% less volatile than the S&P 500. Comparatively, Dime Community Bancshares has a beta of 1.12, meaning that its stock price is 12% more volatile than the S&P 500.

About First Bancorp

First Bancorp operates as the bank holding company for First Bank that provides banking products and services for individuals and small to medium-sized businesses. The company accepts deposit products, such as checking, savings, and money market accounts, as well as time deposits, including certificate of deposits and individual retirement accounts. It also offers loans for a range of consumer and commercial purposes comprising loans for business, real estate, personal, home improvement, and automobiles, as well as residential mortgages and small business administration loans; and accounts receivable financing and factoring, inventory financing, and purchase order financing services. In addition, the company provides credit and debit cards, letter of credits, and safe deposit box rental services, as well as electronic funds transfer services consisting of wire transfers; and internet and mobile banking, cash management, bank-by-phone services, and remote deposit capture services. Further, it offers investment and insurance products, such as mutual funds, annuities, long-term care insurance, life insurance, and company retirement plans, as well as property and casualty insurance products; and financial planning services. The company was founded in 1934 and is headquartered in Southern Pines, North Carolina.

About Dime Community Bancshares

Dime Community Bancshares, Inc. operates as the holding company for Dime Community Bank that engages in the provision of various commercial banking and financial services. The company accepts time, savings, and demand deposits from the businesses, consumers, and local municipalities. It also offers commercial real estate loans; multi-family mortgage loans; residential mortgage loans; letters of credit; secured and unsecured commercial and consumer loans; lines of credit; home equity loans; and construction and land loans. In addition, the company invests in Federal Home Loan Bank, Federal National Mortgage Association, Government National Mortgage Association, and Federal Home Loan Mortgage Corporation mortgage-backed securities, collateralized mortgage obligations, and other asset backed securities; U.S. Treasury securities; New York state and local municipal obligations; U.S. government-sponsored enterprise securities; and corporate bonds. Further, it offers certificate of deposit account registry services and insured cash sweep programs; federal deposit insurance corporation insurance; merchant credit and debit card processing, automated teller machines, cash management services, lockbox processing, online banking services, remote deposit capture, safe deposit boxes, and individual retirement accounts; investment products and services through a third-party broker dealer; and title insurance broker services for small and medium sized businesses, and municipal and consumer relationships. The company was founded in 1910 and is headquartered in Hauppauge, New York.