Financial Analysis: National Bankshares (NASDAQ:NKSH) versus Affinity Bancshares (NASDAQ:AFBI)

Affinity Bancshares (NASDAQ:AFBI) and National Bankshares (NASDAQ:NKSH) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, profitability, analyst recommendations, dividends, risk, valuation and institutional ownership.

Earnings and Valuation

This table compares Affinity Bancshares and National Bankshares”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Affinity Bancshares	$49.99 million	2.49	$5.44 million	$1.15	17.52
National Bankshares	$52.54 million	4.10	$7.62 million	$2.04	16.60

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

Insider and Institutional Ownership

39.3% of Affinity Bancshares shares are held by institutional investors. Comparatively, 29.7% of National Bankshares shares are held by institutional investors. 12.4% of Affinity Bancshares shares are held by insiders. Comparatively, 3.2% of National Bankshares shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Affinity Bancshares and National Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Affinity Bancshares	14.55%	6.61%	0.91%
National Bankshares	15.56%	8.62%	0.80%

Risk and Volatility

Affinity Bancshares has a beta of 0.22, indicating that its share price is 78% less volatile than the S&P 500. Comparatively, National Bankshares has a beta of 0.72, indicating that its share price is 28% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations for Affinity Bancshares and National Bankshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Affinity Bancshares	0	1	0	0	2.00
National Bankshares	0	1	0	0	2.00

Summary

National Bankshares beats Affinity Bancshares on 7 of the 11 factors compared between the two stocks.

About Affinity Bancshares

Affinity Bancshares, Inc. operates as the holding company for Affinity Bank that provides various banking products and services in Georgia. The company offers various deposit accounts, including savings accounts, checking accounts, certificates of deposit, and individual retirement accounts, as well as Kasasa (rewards) deposit program for checking accounts with interest rates or cash-back rewards. It offers commercial and residential real estate, commercial and industrial, residential mortgage, construction and land, and consumer loans, as well as balloon and adjustable-rate loans. In addition, the company invests in U.S. treasury securities; securities issued by the U.S. government and its agencies, or government sponsored enterprises, including mortgage-backed securities and collateralized mortgage obligations; corporate and municipal bonds; certificates of deposit in other financial institutions; and federal and money market funds. Further, it operates a virtual bank under the name FitnessBank, which accepts deposits and provides higher interest rates based on customers meeting certain fitness goals. Affinity Bancshares, Inc. was founded in 1928 and is headquartered in Covington, Georgia.

About National Bankshares

National Bankshares, Inc. operates as the bank holding company for the National Bank of Blacksburg that provides retail and commercial banking products and 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 deposit, health savings accounts, 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 business and consumer debit and credit cards; letters of credit, night depository services, safe deposit boxes, utility payment services, and automatic funds transfer; wealth management, trust, and estate services; non-deposit investment and insurance products; and telephone, mobile, and Internet banking services. The company was founded in 1891 and is headquartered in Blacksburg, Virginia.