National Bankshares (NasdaqCM:NKSH) - Share price, News & Analysis

Q: What is the Fair Price of NKSH when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

NKSH ($32.29) is trading below our estimate of [[fair value]] ($52.08)

NKSH fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	0/6
Past Performance	5/6
Financial Health	6/6
Dividends	5/6

NKSH Stock Overview

Rewards

Trading at 38% below our estimate of its fair value

Earnings grew by 21.6% over the past year

Pays a high and reliable dividend of 4.46%

Risk Analysis

No risks detected for NKSH from our risk checks.

National Bankshares Competitors

Isabella Bank

OTCPK:ISBA

US$188.3m

Southern States Bancshares

NasdaqGS:SSBK

US$194.5m

Central Valley Community Bancorp

NasdaqCM:CVCY

US$173.4m

Bank7

NasdaqGS:BSVN

US$203.4m

Price History & Performance

Summary of all time highs, changes and price drops for National Bankshares
Historical stock prices
Current Share Price	US$32.29
52 Week High	US$39.19
52 Week Low	US$31.11
Beta	0.51
1 Month Change	-0.22%
3 Month Change	-12.73%
1 Year Change	-10.03%
3 Year Change	-15.43%
5 Year Change	-22.19%
Change since IPO	139.22%

Recent News & Updates

May 15

National Bankshares (NASDAQ:NKSH) Is Increasing Its Dividend To US$0.72

The board of National Bankshares, Inc. ( NASDAQ:NKSH ) has announced that it will be increasing its dividend by 2.9% on...

Shareholder Returns

	NKSH	US Banks	US Market
7D	1.1%	-1.9%	-2.5%
1Y	-10.0%	-18.3%	-21.2%

Return vs Industry: NKSH exceeded the US Banks industry which returned -18.3% over the past year.

Return vs Market: NKSH exceeded the US Market which returned -21.2% over the past year.

Price Volatility

Is NKSH's price volatile compared to industry and market?
NKSH volatility
NKSH Average Weekly Movement	2.8%
Banks Industry Average Movement	3.8%
Market Average Movement	8.1%
10% most volatile stocks in US Market	16.8%
10% least volatile stocks in US Market	3.3%

Stable Share Price: NKSH is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: NKSH's weekly volatility (3%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1891	221	F. Denardo	https://www.nationalbankshares.com

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.

National Bankshares Fundamentals Summary

How do National Bankshares's earnings and revenue compare to its market cap?
NKSH fundamental statistics
Market Cap	US$194.15m
Earnings (TTM)	US$20.50m
Revenue (TTM)	US$50.95m

9.5x

P/E Ratio

1.2x

P/B Ratio

Is NKSH overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
NKSH income statement (TTM)
Revenue	US$50.95m
Cost of Revenue	US$0
Gross Profit	US$50.95m
Other Expenses	US$30.45m
Earnings	US$20.50m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	3.41
Gross Margin	100.00%
Net Profit Margin	40.24%
Debt/Equity Ratio	0%

How did NKSH perform over the long term?

See historical performance and comparison

Dividends

4.5%

Current Dividend Yield

43%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is NKSH undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for NKSH?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for NKSH. This is calculated by dividing NKSH's market cap by their current preferred multiple.
What is NKSH's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$194.15m

NKSH key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	n/a
Enterprise Value/EBITDA	n/a
PEG Ratio	9.2x

Price to Earnings Ratio vs Peers

How does NKSH's PE Ratio compare to its peers?

NKSH PE Ratio vs Peers

The above table shows the PE ratio for NKSH vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	9x
ISBA Isabella Bank	10x	9.5%	US$188.3m
SSBK Southern States Bancshares	11.2x	15.3%	US$194.5m
CVCY Central Valley Community Bancorp	6.4x	5.3%	US$173.4m
BSVN Bank7	8.4x	13.2%	US$203.4m
NKSH National Bankshares	9.5x	1.0%	US$194.1m

Forward PE

Price-To-Earnings vs Peers: NKSH is expensive based on its Price-To-Earnings Ratio (9.5x) compared to the peer average (9x).

Price to Earnings Ratio vs Industry

How does NKSH's PE Ratio compare vs other companies in the US Banks Industry?

Price-To-Earnings vs Industry: NKSH is good value based on its Price-To-Earnings Ratio (9.5x) compared to the US Banks industry average (9.5x)

Price to Earnings Ratio vs Fair Ratio

What is NKSH's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

NKSH PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	9.5x
Fair PE Ratio	10.5x

Price-To-Earnings vs Fair Ratio: NKSH is good value based on its Price-To-Earnings Ratio (9.5x) compared to the estimated Fair Price-To-Earnings Ratio (10.5x).

Share Price vs Fair Value

What is the Fair Price of NKSH when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: NKSH ($32.29) is trading below our estimate of fair value ($52.08)

Significantly Below Fair Value: NKSH is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: NKSH is poor value based on its PEG Ratio (9.2x)

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Future Growth

How is National Bankshares forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

1.0%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: NKSH's forecast earnings growth (1% per year) is below the savings rate (1.9%).

Earnings vs Market: NKSH's earnings (1% per year) are forecast to grow slower than the US market (13.6% per year).

High Growth Earnings: NKSH's earnings are forecast to grow, but not significantly.

Revenue vs Market: NKSH's revenue (5.9% per year) is forecast to grow slower than the US market (8.2% per year).

High Growth Revenue: NKSH's revenue (5.9% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if NKSH's Return on Equity is forecast to be high in 3 years time

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Past Performance

How has National Bankshares performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

6.8%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: NKSH has high quality earnings.

Growing Profit Margin: NKSH's current net profit margins (40.2%) are higher than last year (37.3%).

Past Earnings Growth Analysis

Earnings Trend: NKSH's earnings have grown by 6.8% per year over the past 5 years.

Accelerating Growth: NKSH's earnings growth over the past year (21.6%) exceeds its 5-year average (6.8% per year).

Earnings vs Industry: NKSH earnings growth over the past year (21.6%) exceeded the Banks industry 20.8%.

Return on Equity

High ROE: NKSH's Return on Equity (12.7%) is considered low.

Discover strong past performing companies

Financial Health

How is National Bankshares's financial position? (This company is analysed differently as a bank or financial institution)

Financial Health Score

6/6

Financial Health Score 6/6

Asset Level
Allowance for Bad Loans
Low Risk Liabilities
Loan Level
Low Risk Deposits
Level of Bad Loans

Financial Position Analysis

Debt to Equity History and Analysis

Balance Sheet

Financial Institutions Analysis

Asset Level: NKSH's Assets to Equity ratio (10.7x) is moderate.

Allowance for Bad Loans: NKSH has a sufficient allowance for bad loans (272%).

Low Risk Liabilities: 99% of NKSH's liabilities are made up of primarily low risk sources of funding.

Loan Level: NKSH has an appropriate level of Loans to Assets ratio (47%).

Low Risk Deposits: NKSH's Loans to Deposits ratio (53%) is appropriate.

Level of Bad Loans: NKSH has an appropriate level of bad loans (0.3%).

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Dividend

What is National Bankshares's current dividend yield, its reliability and sustainability?

Dividend Score

5/6

Dividend Score 5/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

4.46%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: NKSH's dividend (4.46%) is higher than the bottom 25% of dividend payers in the US market (1.6%).

High Dividend: NKSH's dividend (4.46%) is in the top 25% of dividend payers in the US market (4.25%)

Stability and Growth of Payments

Stable Dividend: NKSH's dividends per share have been stable in the past 10 years.

Growing Dividend: NKSH's dividend payments have increased over the past 10 years.

Current Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (43%), NKSH's dividend payments are well covered by earnings.

Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years or that it will be covered by earnings.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

1.4yrs

Average management tenure

CEO

F. Denardo (69 yo)

4.83yrs

Tenure

US$1,011,592

Compensation

Mr. F. Brad Denardo has been President and Chief Executive Officer of National Bankshares, Inc. since September 1, 2017 and has been its Chairman of the Board since May 15, 2019. He has been Chief Executiv...

CEO Compensation Analysis

Compensation vs Market: F.'s total compensation ($USD1.01M) is below average for companies of similar size in the US market ($USD1.83M).

Compensation vs Earnings: F.'s compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: NKSH's management team is not considered experienced ( 1.4 years average tenure), which suggests a new team.

Board Members

Experienced Board: NKSH's board of directors are considered experienced (9.7 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: NKSH insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/07/03 00:00
End of Day Share Price	2022/07/01 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31