Critical Contrast: First National (NASDAQ:FXNC) versus First Western Financial (NASDAQ:MYFW)

First Western Financial (NASDAQ:MYFW) and First National (NASDAQ:FXNC) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, institutional ownership, risk, analyst recommendations, valuation, dividends and profitability.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
First Western Financial	3.33%	2.44%	0.20%
First National	8.91%	6.52%	0.54%

Analyst Ratings

This is a summary of current ratings and price targets for First Western Financial and First National, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Western Financial	0	1	2	0	2.67
First National	0	1	1	0	2.50

First Western Financial presently has a consensus target price of $23.83, suggesting a potential upside of 35.88%. First National has a consensus target price of $21.50, suggesting a potential downside of 4.87%. Given First Western Financial’s stronger consensus rating and higher possible upside, equities research analysts clearly believe First Western Financial is more favorable than First National.

Institutional and Insider Ownership

60.3% of First Western Financial shares are held by institutional investors. Comparatively, 33.9% of First National shares are held by institutional investors. 17.9% of First Western Financial shares are held by insiders. Comparatively, 16.5% of First National shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares First Western Financial and First National”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Western Financial	$88.93 million	1.91	$5.22 million	$0.62	28.29
First National	$56.42 million	3.59	$9.62 million	$1.12	20.18

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

Risk and Volatility

First Western Financial has a beta of 0.68, meaning that its share price is 32% less volatile than the S&P 500. Comparatively, First National has a beta of 0.54, meaning that its share price is 46% less volatile than the S&P 500.

Summary

First Western Financial beats First National on 8 of the 14 factors compared between the two stocks.

About First Western Financial

First Western Financial, Inc., a financial holding company, provides wealth advisory, private baking, personal trust, investment management, mortgage lending, and institutional asset management services. The company operates through two segments: Wealth Management and Mortgage. The Wealth Management segment provides deposit, loan, life insurance, and trust and investment management advisory products and services. The Mortgage segment engages in soliciting, originating, and selling mortgage loans into the secondary market. It serves entrepreneurs, professionals, high net worth individuals or families, and business and philanthropic organizations. First Western Financial, Inc. was incorporated in 2002 and is headquartered in Denver, Colorado.

About First National

First National Corporation operates as the bank holding company for First Bank that provides various commercial banking services to small and medium-sized businesses, individuals, estates, local governmental entities, and non-profit organizations in Virginia. The company's deposit products include checking, savings, money market, and individual retirement accounts, as well as certificates of deposit and treasury management solutions. Its loan products comprise construction loans, including residential, land acquisition, and development loans; 1-4 family residential real estate loans; and commercial real estate loans that are secured by commercial real estate, including multi-family residential buildings, office and retail buildings, hotels, industrial buildings, and religious facilities. In addition, the company's loan products include commercial and industrial loans that are secured by business assets, such as accounts receivable, equipment, and inventory; home equity loans; and secured and unsecured consumer loans, such as lines of credit, automobile loans, deposit account loans, and installment and demand loans. Further, it provides wealth management services, including estate planning, investment management of assets, trustee under an agreement, trustee under a will, and estate settlement. Additionally, the company offers title insurance and investment services; and holds other real estate owned and office sites, as well as provides internet and mobile banking, remote deposit capture, and other traditional banking services. First National Corporation was founded in 1907 and is headquartered in Strasburg, Virginia.