First Guaranty Bancshares (NASDAQ:FGBI) & Citizens (NASDAQ:CIZN) Critical Analysis

First Guaranty Bancshares (NASDAQ:FGBI) and Citizens (NASDAQ:CIZN) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, dividends, earnings, risk, analyst recommendations, valuation and profitability.

Dividends

First Guaranty Bancshares pays an annual dividend of $0.04 per share and has a dividend yield of 0.5%. Citizens pays an annual dividend of $0.08 per share and has a dividend yield of 0.9%. First Guaranty Bancshares pays out -1.7% of its earnings in the form of a dividend. Citizens pays out 4.8% 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. Citizens has increased its dividend for 1 consecutive years. Citizens is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of current ratings and target prices for First Guaranty Bancshares and Citizens, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Guaranty Bancshares	1	1	0	0	1.50
Citizens	0	1	4	0	2.80

Citizens has a consensus price target of $14.17, indicating a potential upside of 58.29%. Given Citizens’ stronger consensus rating and higher probable upside, analysts clearly believe Citizens is more favorable than First Guaranty Bancshares.

Volatility & Risk

First Guaranty Bancshares has a beta of 0.47, indicating that its share price is 53% less volatile than the S&P 500. Comparatively, Citizens has a beta of 0.09, indicating that its share price is 91% less volatile than the S&P 500.

Earnings & Valuation

This table compares First Guaranty Bancshares and Citizens”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Guaranty Bancshares	$92.00 million	1.53	-$56.02 million	($2.42)	-3.51
Citizens	$40.95 million	1.24	$5.49 million	$1.68	5.33

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

Profitability

This table compares First Guaranty Bancshares and Citizens’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Guaranty Bancshares	-16.83%	-12.25%	-0.60%
Citizens	7.00%	11.28%	0.37%

Insider and Institutional Ownership

39.5% of First Guaranty Bancshares shares are held by institutional investors. Comparatively, 9.7% of Citizens shares are held by institutional investors. 49.4% of First Guaranty Bancshares shares are held by company insiders. Comparatively, 8.9% of Citizens shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Citizens beats First Guaranty Bancshares on 11 of the 17 factors compared between the two stocks.

About First Guaranty Bancshares

First Guaranty Bancshares, Inc. operates as the holding company for First Guaranty Bank that provides commercial banking services in Louisiana and Texas. It offers various deposit products, including personal and business checking, savings, money market, and demand accounts, as well as time deposits to consumers, small businesses, and municipalities. The company provides loans, such as non-farm, non-residential loans secured by real estate, commercial and industrial loans, one- to four-family residential loans, multifamily loans, construction and land development loans, agricultural loans, farmland loans, and consumer and other loans to small to medium-sized businesses and professionals, and individuals. In addition, it offers a range of consumer services, including credit cards, mobile deposit capture, safe deposit boxes, official checks, online and mobile banking, automated teller machines, and online bill pay; provides additional solutions, such as merchant services, remote deposit capture, and lockbox services to business customers; and invests a portion of its assets in securities issued by the United States Government and its agencies, state and municipal obligations, corporate debt securities, mutual funds, and equity securities, as well as invests in mortgage-backed securities primarily issued or guaranteed by United States Government agencies or enterprises. First Guaranty Bancshares, Inc. was founded in 1934 and is headquartered in Hammond, Louisiana.

About Citizens

Citizens Holding Company operates as the bank holding company for The Citizens Bank of Philadelphia that provides various commercial and personal banking products and services. It offers demand deposits; and savings and time deposit accounts. The company also provides secured and unsecured loans; mortgage loans; single and multi-family housing, farm, residential and commercial construction, and commercial real estate loans; commercial, industrial, and agricultural production loans; and consumer loans, as well as issues letters of credit. In addition, it offers personal and corporate trust services; credit life and title insurance; and online and mobile banking services. The company was founded in 1908 and is headquartered in Philadelphia, Mississippi.