Comparing National Bankshares (NASDAQ:NKSH) and First Us Bancsh (NASDAQ:FUSB)

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

Dividends

First Us Bancsh pays an annual dividend of $0.28 per share and has a dividend yield of 1.7%. National Bankshares pays an annual dividend of $1.50 per share and has a dividend yield of 4.2%. First Us Bancsh pays out 26.9% of its earnings in the form of a dividend. National Bankshares pays out 54.5% 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 Us Bancsh has raised its dividend for 3 consecutive years.

Profitability

This table compares First Us Bancsh and National Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Us Bancsh	9.65%	5.92%	0.53%
National Bankshares	20.39%	10.38%	1.03%

Earnings & Valuation

This table compares First Us Bancsh and National Bankshares”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Us Bancsh	$62.99 million	1.46	$5.99 million	$1.04	15.90
National Bankshares	$85.32 million	2.65	$15.83 million	$2.75	12.93

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

Analyst Recommendations

This is a breakdown of current ratings for First Us Bancsh and National Bankshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Us Bancsh	0	1	0	0	2.00
National Bankshares	0	1	1	0	2.50

Volatility & Risk

First Us Bancsh has a beta of 0.22, suggesting that its share price is 78% less volatile than the S&P 500. Comparatively, National Bankshares has a beta of 0.62, suggesting that its share price is 38% less volatile than the S&P 500.

Insider and Institutional Ownership

18.7% of First Us Bancsh shares are owned by institutional investors. Comparatively, 29.7% of National Bankshares shares are owned by institutional investors. 12.1% of First Us Bancsh shares are owned by company insiders. Comparatively, 3.3% of National Bankshares shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

National Bankshares beats First Us Bancsh on 12 of the 16 factors compared between the two stocks.

About First Us Bancsh

First US Bancshares, Inc. operates as the bank holding company for First US Bank that provides commercial banking products and services. The company offers non-interest-bearing demand deposits, savings accounts, NOW accounts, money market demand accounts, individual retirement accounts, and time deposits. Its loan products include commercial construction, land, and land development loans, including residential housing projects, commercial and industrial development, and for purchase and improvement of raw land for agricultural production; mortgage loans on one-to-four family and multi-family residential properties; real estate loans secured by commercial and industrial properties, office or mixed-use facilities, strip shopping centers, and other commercial properties; commercial and industrial loans and leases; and secured and unsecured personal loans, including automobile loans, loans for household and personal purposes, and other direct consumer installment loans. The company also provides loans secured by collateral in form of personal property items. In addition, it provides letters of credit; and safe deposit box and remote deposit capture services. The company serves small-and medium-sized businesses, property managers, business executives, professionals, and other individuals. The company was formerly known as United Security Bancshares, Inc. and changed its name to First US Bancshares, Inc. in October 2016. First US Bancshares, Inc. was founded in 1952 and is headquartered in Birmingham, Alabama.

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.