Analyzing NBT Bancorp (NASDAQ:NBTB) and National Bankshares (NASDAQ:NKSH)

National Bankshares (NASDAQ:NKSH) and NBT Bancorp (NASDAQ:NBTB) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, dividends, earnings, profitability, analyst recommendations, institutional ownership and valuation.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for National Bankshares and NBT Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
National Bankshares	0	0	1	0	3.00
NBT Bancorp	0	3	2	1	2.67

National Bankshares presently has a consensus target price of $38.00, indicating a potential upside of 38.79%. NBT Bancorp has a consensus target price of $48.80, indicating a potential upside of 5.22%. Given National Bankshares’ stronger consensus rating and higher probable upside, equities research analysts plainly believe National Bankshares is more favorable than NBT Bancorp.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
National Bankshares	$43.84 million	3.97	$15.69 million	$1.45	18.88
NBT Bancorp	$563.75 million	3.88	$118.78 million	$2.84	16.33

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

Profitability

This table compares National Bankshares and NBT Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
National Bankshares	11.44%	5.85%	0.50%
NBT Bancorp	17.37%	9.36%	1.01%

Risk & Volatility

National Bankshares has a beta of 0.61, suggesting that its share price is 39% less volatile than the S&P 500. Comparatively, NBT Bancorp has a beta of 0.53, suggesting that its share price is 47% less volatile than the S&P 500.

Insider and Institutional Ownership

29.7% of National Bankshares shares are held by institutional investors. Comparatively, 58.5% of NBT Bancorp shares are held by institutional investors. 2.8% of National Bankshares shares are held by company insiders. Comparatively, 3.3% of NBT Bancorp shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

National Bankshares pays an annual dividend of $1.56 per share and has a dividend yield of 5.7%. NBT Bancorp pays an annual dividend of $1.36 per share and has a dividend yield of 2.9%. National Bankshares pays out 107.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. NBT Bancorp pays out 47.9% of its earnings in the form of a dividend. NBT Bancorp has raised its dividend for 12 consecutive years.

Summary

NBT Bancorp beats National Bankshares on 12 of the 18 factors compared between the two stocks.

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.

About NBT Bancorp

NBT Bancorp Inc., a financial holding company, provides commercial banking, retail banking, and wealth management services. Its deposit products include demand deposit, savings, negotiable order of withdrawal, money market deposit, and certificate of deposit accounts. The company's loan portfolio comprises indirect and direct consumer, home equity, mortgages, business banking loans, and commercial loans; commercial and industrial, commercial real estate, agricultural, and commercial construction loans; and residential real estate loans. It also provides trust and investment services; financial planning and life insurance services; and retirement plan administration and recordkeeping services. In addition, the company offers insurance products comprising personal property and casualty, business liability, and commercial insurance, as well as other products and services through 24-hour online, mobile, and telephone channels that enable customers to check balances, make deposits, transfer funds, pay bills, access statements, apply for loans, and access various other products and services. Further, it operates as a property management and passive investment company, as well as investment advisor that provides investment management and financial consulting services. The company operates in upstate New York, northeastern Pennsylvania, southern New Hampshire, western Massachusetts, Vermont, southern Maine, and central and northwestern Connecticut. NBT Bancorp Inc. was founded in 1856 and is headquartered in Norwich, New York.