Home BancShares (NASDAQ: HOMB) and Central Valley Community Bancorp (NASDAQ:CVCY) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, risk, dividends, profitability, valuation, earnings and institutional ownership.

Risk and Volatility

Home BancShares has a beta of 1.19, meaning that its stock price is 19% more volatile than the S&P 500. Comparatively, Central Valley Community Bancorp has a beta of 0.19, meaning that its stock price is 81% less volatile than the S&P 500.

Valuation & Earnings

This table compares Home BancShares and Central Valley Community Bancorp’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Home BancShares $500.41 million 6.38 $191.74 million $1.34 16.66
Central Valley Community Bancorp $62.90 million 3.88 $15.14 million $1.24 16.10

Home BancShares has higher revenue and earnings than Central Valley Community Bancorp. Central Valley Community Bancorp is trading at a lower price-to-earnings ratio than Home BancShares, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current recommendations for Home BancShares and Central Valley Community Bancorp, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Home BancShares 0 3 3 0 2.50
Central Valley Community Bancorp 0 1 0 0 2.00

Home BancShares currently has a consensus target price of $28.70, indicating a potential upside of 28.56%. Central Valley Community Bancorp has a consensus target price of $24.00, indicating a potential upside of 20.18%. Given Home BancShares’ stronger consensus rating and higher probable upside, analysts clearly believe Home BancShares is more favorable than Central Valley Community Bancorp.

Dividends

Home BancShares pays an annual dividend of $0.44 per share and has a dividend yield of 2.0%. Central Valley Community Bancorp pays an annual dividend of $0.24 per share and has a dividend yield of 1.2%. Home BancShares pays out 32.8% of its earnings in the form of a dividend. Central Valley Community Bancorp pays out 19.4% 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.

Insider and Institutional Ownership

60.6% of Home BancShares shares are held by institutional investors. Comparatively, 43.9% of Central Valley Community Bancorp shares are held by institutional investors. 11.3% of Home BancShares shares are held by company insiders. Comparatively, 21.6% of Central Valley Community Bancorp shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Home BancShares and Central Valley Community Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Home BancShares 33.97% 13.77% 1.85%
Central Valley Community Bancorp 23.78% 8.94% 1.06%

Summary

Home BancShares beats Central Valley Community Bancorp on 14 of the 16 factors compared between the two stocks.

Home BancShares Company Profile

Home BancShares, Inc. is a bank holding company. The Company is engaged in providing a range of commercial and retail banking, and related financial services to businesses, real estate developers and investors, individuals and municipalities through its community bank subsidiary, Centennial Bank (the Bank). It operates through community banking segment. It offers a range of products and services, including Internet banking, mobile banking and voice response information, cash management, overdraft protection, direct deposit, safe deposit boxes, the United States savings bonds and automatic account transfers. The Bank has locations in Arkansas, Florida, South Alabama and New York City. As of December 31, 2016, the Company conducted business principally through 76 branches in Arkansas, 59 branches in Florida, six branches in Alabama and one branch in New York City. It originates loans secured by single and multi-family real estate, residential construction and commercial buildings.

Central Valley Community Bancorp Company Profile

Central Valley Community Bancorp is a bank holding company, which operates through its subsidiary, Central Valley Community Bank (the Bank). The Company’s principal business is to provide, through its banking subsidiary, financial services in its primary market area in California. It serves over seven contiguous counties in California’s central valley, including Fresno County, Madera County, Merced County, Sacramento County, San Joaquin County, Stanislaus County, and Tulare County, and surrounding areas through the Bank. The Bank conducts a commercial banking business, which includes accepting demand, savings and time deposits and making commercial, real estate and consumer loans. It provides domestic and international wire transfer services and provides safe deposit boxes and other customary banking services. It operates over 20 full-service banking offices in Clovis, Exeter, Fresno, Kerman, Lodi, Madera, Merced, Modesto, Oakhurst, Prather, Sacramento, Stockton, Tracy and Visalia.

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