Analyzing First Citizens BancShares (NASDAQ:FCNCA) & Security Federal (OTCMKTS:SFDL)

Security Federal (OTCMKTS:SFDL) and First Citizens BancShares (NASDAQ:FCNCA) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, earnings, valuation, dividends, profitability, risk and analyst recommendations.

Profitability

This table compares Security Federal and First Citizens BancShares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Security Federal	15.17%	12.35%	0.85%
First Citizens BancShares	15.21%	11.18%	1.03%

Volatility & Risk

Security Federal has a beta of 0.45, suggesting that its share price is 55% less volatile than the S&P 500. Comparatively, First Citizens BancShares has a beta of 0.65, suggesting that its share price is 35% less volatile than the S&P 500.

Institutional and Insider Ownership

78.0% of First Citizens BancShares shares are owned by institutional investors. 36.4% of Security Federal shares are owned by company insiders. Comparatively, 13.4% of First Citizens BancShares shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Security Federal and First Citizens BancShares”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Security Federal	$90.14 million	1.18	$13.67 million	$3.81	9.06
First Citizens BancShares	$9.25 billion	2.46	$2.21 billion	$165.72	11.51

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

Analyst Recommendations

This is a summary of current recommendations for Security Federal and First Citizens BancShares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Security Federal	0	0	0	0	0.00
First Citizens BancShares	0	7	5	1	2.54

First Citizens BancShares has a consensus price target of $2,211.00, suggesting a potential upside of 15.96%. Given First Citizens BancShares’ stronger consensus rating and higher probable upside, analysts plainly believe First Citizens BancShares is more favorable than Security Federal.

Dividends

Security Federal pays an annual dividend of $0.64 per share and has a dividend yield of 1.9%. First Citizens BancShares pays an annual dividend of $8.40 per share and has a dividend yield of 0.4%. Security Federal pays out 16.8% of its earnings in the form of a dividend. First Citizens BancShares pays out 5.1% 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. First Citizens BancShares has increased its dividend for 8 consecutive years.

Summary

First Citizens BancShares beats Security Federal on 15 of the 18 factors compared between the two stocks.

About Security Federal

Security Federal Corporation operates as the bank holding company for Security Federal Bank that provides various banking products and services. It offers various deposit products, such as savings and checking accounts, money market accounts, fixed interest rate certificates with varying maturities, and individual retirement accounts. The company provides real estate loans comprising commercial real estate loans secured by non-residential commercial properties, churches, hotels, residential developments, and multi-family dwellings; one-to-four family residential real estate loans; and construction loans and loans for the acquisition, development, and construction of residential subdivisions and commercial projects. In addition, it offers commercial and agricultural business loans secured by business equipment, furniture and fixtures, inventory, and receivables, or unsecured; and consumer loans including home improvements, residential lots, mortgage, automobiles, boats, mobile homes, recreational vehicles, and education. The company offers trust, financial planning, and financial management services; and insurance agency services, such as auto, business, and home insurance. Additionally, it invests in various types of liquid assets, including U.S. Treasury obligations and securities of various federal agencies, certificates of deposit at insured institutions, mutual funds, bankers' acceptances, and federal funds, as well as commercial paper and corporate debt securities. It through branch offices in Aiken, Lexington, Richland and Saluda counties in South Carolina and Columbia; and Richmond counties in Georgia. Security Federal Corporation was founded in 1922 and is headquartered in Aiken, South Carolina.

About First Citizens BancShares

First Citizens BancShares, Inc. operates as the holding company for First-Citizens Bank & Trust Company that provides retail and commercial banking services to individuals, businesses, and professionals. The company's deposit products include checking, savings, money market, and time deposit accounts. Its loan product portfolio comprises commercial construction and mortgage; and commercial and industrial leases, as well as small business administration loans. In addition, the company offers consumer loans, such as residential and revolving mortgage, consumer auto, and other consumer loans. Further, it provides wealth management services, including annuities, brokerage services, and third-party mutual funds, as well as investment management and advisory services. The company provides its products and services through its branch network. First Citizens BancShares, Inc. was founded in 1898 and is headquartered in Raleigh, North Carolina.