Home Bancshares, Inc. (Conway, AR) (NASDAQ:HOMB) and First Republic Bank (NYSE:FRC) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, dividends, institutional ownership and earnings.
Insider and Institutional Ownership
68.4% of Home Bancshares, Inc. (Conway, AR) shares are owned by institutional investors. Comparatively, 95.7% of First Republic Bank shares are owned by institutional investors. 8.7% of Home Bancshares, Inc. (Conway, AR) shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Profitability
This table compares Home Bancshares, Inc. (Conway, AR) and First Republic Bank's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Home Bancshares, Inc. (Conway, AR) | 26.02% | 12.05% | 1.88% |
| First Republic Bank | 22.95% | 10.96% | 0.81% |
Valuation and Earnings
This table compares Home Bancshares, Inc. (Conway, AR) and First Republic Bank's gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Home Bancshares, Inc. (Conway, AR) | $817.50 million | 3.32 | $289.54 million | $1.73 | 9.50 |
| First Republic Bank | $4.16 billion | 5.30 | $930.33 million | $5.20 | 24.62 |
First Republic Bank has higher revenue and earnings than Home Bancshares, Inc. (Conway, AR). Home Bancshares, Inc. (Conway, AR) is trading at a lower price-to-earnings ratio than First Republic Bank, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Home Bancshares, Inc. (Conway, AR) has a beta of 1.54, suggesting that its stock price is 54% more volatile than the S&P 500. Comparatively, First Republic Bank has a beta of 1.16, suggesting that its stock price is 16% more volatile than the S&P 500.
Dividends
Home Bancshares, Inc. (Conway, AR) pays an annual dividend of $0.52 per share and has a dividend yield of 3.2%. First Republic Bank pays an annual dividend of $0.80 per share and has a dividend yield of 0.6%. Home Bancshares, Inc. (Conway, AR) pays out 30.1% of its earnings in the form of a dividend. First Republic Bank pays out 15.4% 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. Home Bancshares, Inc. (Conway, AR) has raised its dividend for 9 consecutive years and First Republic Bank has raised its dividend for 6 consecutive years. Home Bancshares, Inc. (Conway, AR) is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Analyst Recommendations
This is a breakdown of recent ratings and recommmendations for Home Bancshares, Inc. (Conway, AR) and First Republic Bank, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Home Bancshares, Inc. (Conway, AR) | 0 | 2 | 3 | 0 | 2.60 |
| First Republic Bank | 1 | 9 | 7 | 0 | 2.35 |
Home Bancshares, Inc. (Conway, AR) presently has a consensus price target of $18.60, suggesting a potential upside of 13.21%. First Republic Bank has a consensus price target of $119.9375, suggesting a potential downside of 6.33%. Given Home Bancshares, Inc. (Conway, AR)'s stronger consensus rating and higher possible upside, analysts plainly believe Home Bancshares, Inc. (Conway, AR) is more favorable than First Republic Bank.
Summary
Home Bancshares, Inc. (Conway, AR) beats First Republic Bank on 9 of the 17 factors compared between the two stocks.
