Critical Survey: WSFS Financial (NASDAQ:WSFS) & First Community (NASDAQ:FCCO)

WSFS Financial (NASDAQ:WSFS) and First Community (NASDAQ:FCCO) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, earnings, risk, dividends, analyst recommendations, institutional ownership and valuation.

Profitability

This table compares WSFS Financial and First Community’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
WSFS Financial	23.34%	11.71%	1.47%
First Community	18.32%	13.23%	1.16%

Dividends

WSFS Financial pays an annual dividend of $0.80 per share and has a dividend yield of 1.1%. First Community pays an annual dividend of $0.68 per share and has a dividend yield of 2.1%. WSFS Financial pays out 13.4% of its earnings in the form of a dividend. First Community pays out 25.4% 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. WSFS Financial has increased its dividend for 1 consecutive years and First Community has increased its dividend for 4 consecutive years. First Community is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

88.5% of WSFS Financial shares are owned by institutional investors. Comparatively, 61.3% of First Community shares are owned by institutional investors. 1.1% of WSFS Financial shares are owned by company insiders. Comparatively, 8.8% of First Community shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for WSFS Financial and First Community, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
WSFS Financial	0	5	3	0	2.38
First Community	0	1	2	0	2.67

WSFS Financial presently has a consensus target price of $83.07, suggesting a potential upside of 9.93%. First Community has a consensus target price of $37.50, suggesting a potential upside of 16.57%. Given First Community’s stronger consensus rating and higher possible upside, analysts plainly believe First Community is more favorable than WSFS Financial.

Valuation and Earnings

This table compares WSFS Financial and First Community”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
WSFS Financial	$1.36 billion	2.84	$287.35 million	$5.98	12.64
First Community	$114.00 million	2.65	$19.20 million	$2.68	12.00

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

Volatility and Risk

WSFS Financial has a beta of 0.76, suggesting that its stock price is 24% less volatile than the S&P 500. Comparatively, First Community has a beta of 0.33, suggesting that its stock price is 67% less volatile than the S&P 500.

Summary

WSFS Financial beats First Community on 11 of the 17 factors compared between the two stocks.

About WSFS Financial

WSFS Financial Corporation operates as the savings and loan holding company for the Wilmington Savings Fund Society, FSB that provides various banking services in the United States. It operates through three segments: WSFS Bank, Cash Connect, and Wealth Management. It offers various deposit products, including savings accounts, demand deposits, interest-bearing demand deposits, money market deposit accounts, and certificates of deposit, as well as accepts jumbo certificates of deposit from individuals, businesses, and municipalities. The company also provides a range of loans, which comprise fixed and adjustable rate residential loans; commercial mortgage and commercial loans; commercial construction loans; commercial loans for working capital, financing equipment and real estate acquisitions, business expansion and other business purposes; and consumer credit products, such as home equity loans, home equity lines of credit, automobile loans, unsecured lines of credit, and other secured and unsecured personal installment loans. In addition, it offers insurance products; planning and advisory services, investment management, trust services, and credit and deposit products to individual, corporate and institutional clients; retail securities and insurance brokerage services; mortgage and title services; residential mortgage and refinancing solutions; and leases small equipment and fixed assets, as well as provides financial planning, customized investment strategies, brokerage products, fiduciary, and wealth management services. Further, the company provides ATM vault cash, smart safe, and other cash logistics services; and online reporting and ATM cash management, predictive cash ordering and reconcilement services, armored carrier management, loss protection, and deposit safe cash logistics services, as well as trustee, agency, bankruptcy administration, custodial and commercial domicile services. The company was founded in 1832 and is based in Wilmington, Delaware.

About First Community

First Community Corporation operates as the bank holding company for First Community Bank that provides various commercial and retail banking products and services to small-to-medium sized businesses, professionals, and individuals. The company operates through Commercial and Retail Banking, Mortgage Banking, and Investment Advisory and Non-Deposit segments. Its deposit products include checking, NOW, savings, and individual retirement accounts; and demand deposits, as well as other time deposits, such as daily money market accounts and longer-term certificates of deposit. The company's loan portfolio comprises commercial loans that include secured and unsecured loans for working capital, business expansion, and the purchase of equipment and machinery; consumer loans, including secured and unsecured loans for financing automobiles, home improvements, education, and personal investments; real estate construction and acquisition loans; and fixed and variable rate mortgage loans. It also provides online banking, internet banking, cash management, safe deposit boxes, direct deposit of payroll and social security checks, and automatic drafts for various accounts. In addition, the company offers non-deposit investment products and other investment brokerage services; VISA and MasterCard credit card services; investment advisory services; and insurance services. The company was incorporated in 1994 and is headquartered in Lexington, South Carolina.