Home BancShares (NYSE:HOMB) vs. Hancock Whitney (NASDAQ:HWC) Critical Contrast

Hancock Whitney (NASDAQ:HWC) and Home BancShares (NYSE:HOMB) are both mid-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, profitability, dividends, analyst recommendations, risk and valuation.

Dividends

Hancock Whitney pays an annual dividend of $2.00 per share and has a dividend yield of 2.8%. Home BancShares pays an annual dividend of $0.84 per share and has a dividend yield of 2.8%. Hancock Whitney pays out 35.2% of its earnings in the form of a dividend. Home BancShares pays out 34.9% 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. Hancock Whitney has raised its dividend for 3 consecutive years and Home BancShares has raised its dividend for 15 consecutive years. Home BancShares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

81.2% of Hancock Whitney shares are owned by institutional investors. Comparatively, 67.3% of Home BancShares shares are owned by institutional investors. 0.9% of Hancock Whitney shares are owned by insiders. Comparatively, 6.3% of Home BancShares shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Hancock Whitney and Home BancShares”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hancock Whitney	$1.52 billion	3.94	$486.07 million	$5.68	12.57
Home BancShares	$1.48 billion	3.95	$475.44 million	$2.41	12.32

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

Risk and Volatility

Hancock Whitney has a beta of 1.05, meaning that its share price is 5% more volatile than the S&P 500. Comparatively, Home BancShares has a beta of 0.8, meaning that its share price is 20% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and target prices for Hancock Whitney and Home BancShares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hancock Whitney	0	1	7	2	3.10
Home BancShares	0	3	3	1	2.71

Hancock Whitney currently has a consensus price target of $75.25, indicating a potential upside of 5.38%. Home BancShares has a consensus price target of $32.60, indicating a potential upside of 9.77%. Given Home BancShares’ higher possible upside, analysts clearly believe Home BancShares is more favorable than Hancock Whitney.

Profitability

This table compares Hancock Whitney and Home BancShares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hancock Whitney	24.05%	11.16%	1.39%
Home BancShares	32.18%	11.16%	2.03%

Summary

Hancock Whitney beats Home BancShares on 9 of the 17 factors compared between the two stocks.

About Hancock Whitney

Hancock Whitney Corporation operates as the financial holding company for Hancock Whitney Bank that provides traditional and online banking services to commercial, small business, and retail customers. It offers various transaction and savings deposit products consisting of brokered deposits, time deposits, and money market accounts; treasury management services, secured and unsecured loan products including revolving credit facilities, and letters of credit and similar financial guarantees; and trust and investment management services to retirement plans, corporations, and individuals, and investment advisory and brokerage products. The company also provides commercial and industrial loans including real and non-real estate loans; construction and land development loans; and residential mortgages, as well as consumer loans. In addition, it offers commercial finance products to middle market and corporate clients, including leases and related structures; facilitates investments in new market tax credit activities and holding certain foreclosed assets; provides customers access to fixed annuity and life insurance products; and underwriting transactions products, as well as debt and mortgage-related securities. The company was founded in 1899 and is headquartered in Gulfport, Mississippi.

About Home BancShares

Home Bancshares, Inc. (Conway, AR) operates as the bank holding company for Centennial Bank that provides commercial and retail banking, and related financial services to businesses, real estate developers and investors, individuals, and municipalities. Its deposit products include checking, savings, and money market accounts, as well as certificates of deposit. The company's loan portfolio comprises non-farm/non-residential real estate, construction/land development, residential mortgage, consumer, agricultural, and commercial and industrial loans. It provides internet banking, mobile banking and voice response information, cash management, overdraft protection, direct deposit, and automatic account transfer services, as well as safe deposit boxes and the United States savings bonds. In addition, the company writes policies for commercial and personal lines of business, including insurance for property, casualty, life, health, and employee benefits. It operates through branches in Arkansas, Florida, Alabama, Texas, and New York City. Home Bancshares, Inc. (Conway, AR) was founded in 1998 and is headquartered in Conway, Arkansas.