Home Bancshares, Inc. (Conway, AR) (NASDAQ:HOMB) and Great Western Bancorp (NYSE:GWB) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, profitability, valuation, risk, institutional ownership and earnings.
Dividends
Home Bancshares, Inc. (Conway, AR) pays an annual dividend of $0.56 per share and has a dividend yield of 2.7%. Great Western Bancorp pays an annual dividend of $0.04 per share and has a dividend yield of 0.2%. Home Bancshares, Inc. (Conway, AR) pays out 32.4% of its earnings in the form of a dividend. Great Western Bancorp pays out 2.5% 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. Home Bancshares, Inc. (Conway, AR) is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional & Insider Ownership
67.2% of Home Bancshares, Inc. (Conway, AR) shares are held by institutional investors. Comparatively, 96.4% of Great Western Bancorp shares are held by institutional investors. 8.7% of Home Bancshares, Inc. (Conway, AR) shares are held by insiders. Comparatively, 0.5% of Great Western Bancorp shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Analyst Recommendations
This is a summary of recent recommendations and price targets for Home Bancshares, Inc. (Conway, AR) and Great Western Bancorp, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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Home Bancshares, Inc. (Conway, AR) | 0 | 2 | 2 | 0 | 2.50 |
Great Western Bancorp | 1 | 2 | 2 | 0 | 2.20 |
Home Bancshares, Inc. (Conway, AR) presently has a consensus price target of $17.25, indicating a potential downside of 18.29%. Great Western Bancorp has a consensus price target of $17.40, indicating a potential downside of 27.47%. Given Home Bancshares, Inc. (Conway, AR)'s stronger consensus rating and higher probable upside, analysts clearly believe Home Bancshares, Inc. (Conway, AR) is more favorable than Great Western Bancorp.
Risk & Volatility
Home Bancshares, Inc. (Conway, AR) has a beta of 1.49, suggesting that its stock price is 49% more volatile than the S&P 500. Comparatively, Great Western Bancorp has a beta of 1.33, suggesting that its stock price is 33% more volatile than the S&P 500.
Profitability
This table compares Home Bancshares, Inc. (Conway, AR) and Great Western Bancorp's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
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Home Bancshares, Inc. (Conway, AR) | 26.02% | 12.05% | 1.88% |
Great Western Bancorp | -137.93% | 6.62% | 0.70% |
Earnings & Valuation
This table compares Home Bancshares, Inc. (Conway, AR) and Great Western Bancorp's revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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Home Bancshares, Inc. (Conway, AR) | $817.50 million | 4.27 | $289.54 million | $1.73 | 12.20 |
Great Western Bancorp | $493.59 million | 2.68 | $-680,810,000.00 | $1.60 | 14.99 |
Home Bancshares, Inc. (Conway, AR) has higher revenue and earnings than Great Western Bancorp. Home Bancshares, Inc. (Conway, AR) is trading at a lower price-to-earnings ratio than Great Western Bancorp, indicating that it is currently the more affordable of the two stocks.
Summary
Home Bancshares, Inc. (Conway, AR) beats Great Western Bancorp on 14 of the 16 factors compared between the two stocks.