Park Sterling (NASDAQ: PSTB) and Hometrust Bancshares (NASDAQ:HTBI) are both small-cap financials companies, but which is the better business? We will compare the two companies based on the strength of their profitability, institutional ownership, valuation, risk, analyst recommendations, earnings and dividends.

Analyst Recommendations

This is a breakdown of recent recommendations for Park Sterling and Hometrust Bancshares, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Park Sterling 0 2 0 0 2.00
Hometrust Bancshares 0 2 1 0 2.33

Hometrust Bancshares has a consensus target price of $28.00, suggesting a potential upside of 7.69%. Given Hometrust Bancshares’ stronger consensus rating and higher possible upside, analysts plainly believe Hometrust Bancshares is more favorable than Park Sterling.

Dividends

Park Sterling pays an annual dividend of $0.16 per share and has a dividend yield of 1.2%. Hometrust Bancshares does not pay a dividend. Park Sterling pays out 28.6% of its earnings in the form of a dividend.

Insider & Institutional Ownership

82.6% of Park Sterling shares are owned by institutional investors. Comparatively, 60.3% of Hometrust Bancshares shares are owned by institutional investors. 7.3% of Park Sterling shares are owned by insiders. Comparatively, 6.3% of Hometrust Bancshares shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Park Sterling and Hometrust Bancshares’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Park Sterling $140.91 million 4.86 $19.94 million $0.56 22.98
Hometrust Bancshares $114.88 million 4.29 $11.72 million $0.73 35.62

Park Sterling has higher revenue and earnings than Hometrust Bancshares. Park Sterling is trading at a lower price-to-earnings ratio than Hometrust Bancshares, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Park Sterling and Hometrust Bancshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Park Sterling 26.18% 9.35% 1.06%
Hometrust Bancshares 11.28% 4.71% 0.59%

Volatility & Risk

Park Sterling has a beta of 0.85, meaning that its share price is 15% less volatile than the S&P 500. Comparatively, Hometrust Bancshares has a beta of 0.35, meaning that its share price is 65% less volatile than the S&P 500.

Summary

Park Sterling beats Hometrust Bancshares on 10 of the 16 factors compared between the two stocks.

Park Sterling Company Profile

Park Sterling Corporation is a holding company for Park Sterling Bank (the Bank). The Bank is a North Carolina-chartered commercial non-member bank. The Company provides banking services to small and medium-sized businesses, real estate owners, residential builders, institutions, professionals and consumers doing business or residing within its target markets. It provides a range of banking products, including personal, business and non-profit checking accounts, interest on lawyer trust accounts (IOLTA), individual retirement accounts, business and personal money market accounts, time deposits, overdraft protection, safe deposit boxes, and online and mobile banking. Its wealth management activities include investment management, private banking, personal trust and investment brokerage services. Its cash management activities include remote deposit capture, lockbox services, sweep accounts, purchasing cards, automated clearing house (ACH) and wire payments.

Hometrust Bancshares Company Profile

HomeTrust Bancshares, Inc. is a bank holding company of HomeTrust Bank (the Bank). The Bank’s principal business consists of attracting deposits from the public and investing those funds, along with borrowed funds, in loans secured primarily by first and second mortgages on one- to four-family residences, including home equity loans, construction and land/lot loans, commercial real estate loans, construction and development loans, commercial and industrial loans, indirect automobile, and municipal leases. Municipal leases are secured primarily by a ground lease for a firehouse or an equipment lease for fire trucks and firefighting equipment to fire departments located throughout North and South Carolina. The Company purchases investment securities consisting primarily of securities issued by the United States Government agencies and government-sponsored enterprises, as well as certificates of deposit insured by the Federal Deposit Insurance Corporation (FDIC).

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