Home Bancshares (HOMB) vs. Pacific Continental (PCBK) Head to Head Analysis

Home Bancshares (NASDAQ: HOMB) and Pacific Continental (NASDAQ:PCBK) are both financials companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, dividends, valuation, analyst recommendations, earnings, profitability and institutional ownership.

Profitability

This table compares Home Bancshares and Pacific Continental’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Home Bancshares 21.79% 11.18% 1.63%
Pacific Continental 26.45% 10.15% 1.10%

Risk and Volatility

Home Bancshares has a beta of 1.15, indicating that its stock price is 15% more volatile than the S&P 500. Comparatively, Pacific Continental has a beta of 0.8, indicating that its stock price is 20% less volatile than the S&P 500.

Institutional and Insider Ownership

63.0% of Home Bancshares shares are held by institutional investors. Comparatively, 67.5% of Pacific Continental shares are held by institutional investors. 11.3% of Home Bancshares shares are held by insiders. Comparatively, 4.8% of Pacific Continental shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Home Bancshares and Pacific Continental’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Home Bancshares $619.89 million 6.53 $135.08 million $0.91 25.63
Pacific Continental $97.76 6,521,685.76 $19.77 $1.13 24.78

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

Dividends

Home Bancshares pays an annual dividend of $0.44 per share and has a dividend yield of 1.9%. Pacific Continental pays an annual dividend of $0.44 per share and has a dividend yield of 1.6%. Home Bancshares pays out 48.4% of its earnings in the form of a dividend. Pacific Continental pays out 38.9% 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.

Analyst Recommendations

This is a summary of recent ratings for Home Bancshares and Pacific Continental, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Home Bancshares 0 4 2 0 2.33
Pacific Continental 0 1 0 0 2.00

Home Bancshares currently has a consensus target price of $27.75, suggesting a potential upside of 19.00%. Pacific Continental has a consensus target price of $28.00, suggesting a potential upside of 0.00%. Given Home Bancshares’ stronger consensus rating and higher probable upside, research analysts clearly believe Home Bancshares is more favorable than Pacific Continental.

Summary

Home Bancshares beats Pacific Continental on 11 of the 16 factors compared between the two stocks.

About Home Bancshares

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 September 26, 2017, the Company conducted business principally through 76 branches in Arkansas, 89 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.

About Pacific Continental

Pacific Continental Corporation is a bank holding company. The Company’s principal business activities are conducted through its subsidiary, Pacific Continental Bank (the Bank), an Oregon state-chartered bank with deposits insured by the Federal Deposit Insurance Corporation. The Bank operates in three primary markets: Eugene, Oregon, Portland; Oregon/Southwest Washington, and Seattle, Washington. As of December 31, 2016, the Bank operated 15 full-service offices in Oregon and Washington and two loan production offices in Washington and Colorado. The Bank primarily operates in large commercial markets and provides banking and related services designed for community-based businesses, nonprofit organizations, professional service providers and banking services for business owners. It provides traditional commercial and consumer banking services, including cash management products for businesses, online banking, safe deposit services debit and automated teller machine cards and others.

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