Home Bancshares, Inc. (Conway, AR) (NYSE:HOMB) & First Community (NASDAQ:FCCO) Critical Analysis

First Community (NASDAQ:FCCOGet Free Report) and Home Bancshares, Inc. (Conway, AR) (NYSE:HOMBGet Free Report) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their institutional ownership, profitability, valuation, analyst recommendations, earnings, risk and dividends.

Profitability

This table compares First Community and Home Bancshares, Inc. (Conway, AR)’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
First Community 12.32% 8.57% 0.61%
Home Bancshares, Inc. (Conway, AR) 28.17% 10.52% 1.75%

Institutional & Insider Ownership

61.3% of First Community shares are held by institutional investors. Comparatively, 67.3% of Home Bancshares, Inc. (Conway, AR) shares are held by institutional investors. 3.0% of First Community shares are held by insiders. Comparatively, 7.7% of Home Bancshares, Inc. (Conway, AR) shares are held by 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.

Analyst Recommendations

This is a summary of current ratings and target prices for First Community and Home Bancshares, Inc. (Conway, AR), as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Community 0 0 1 0 3.00
Home Bancshares, Inc. (Conway, AR) 0 2 2 0 2.50

First Community presently has a consensus target price of $21.00, suggesting a potential upside of 23.89%. Home Bancshares, Inc. (Conway, AR) has a consensus target price of $26.00, suggesting a potential upside of 10.45%. Given First Community’s stronger consensus rating and higher probable upside, equities analysts clearly believe First Community is more favorable than Home Bancshares, Inc. (Conway, AR).

Valuation and Earnings

This table compares First Community and Home Bancshares, Inc. (Conway, AR)’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First Community $83.12 million 1.56 $11.84 million $1.43 11.85
Home Bancshares, Inc. (Conway, AR) $1.34 billion 3.51 $392.93 million $1.94 12.13

Home Bancshares, Inc. (Conway, AR) has higher revenue and earnings than First Community. First Community is trading at a lower price-to-earnings ratio than Home Bancshares, Inc. (Conway, AR), indicating that it is currently the more affordable of the two stocks.

Dividends

First Community pays an annual dividend of $0.56 per share and has a dividend yield of 3.3%. Home Bancshares, Inc. (Conway, AR) pays an annual dividend of $0.72 per share and has a dividend yield of 3.1%. First Community pays out 39.2% of its earnings in the form of a dividend. Home Bancshares, Inc. (Conway, AR) pays out 37.1% 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. First Community has increased its dividend for 2 consecutive years and Home Bancshares, Inc. (Conway, AR) has increased its dividend for 13 consecutive years.

Risk & Volatility

First Community has a beta of 0.44, suggesting that its stock price is 56% less volatile than the S&P 500. Comparatively, Home Bancshares, Inc. (Conway, AR) has a beta of 1.09, suggesting that its stock price is 9% more volatile than the S&P 500.

Summary

Home Bancshares, Inc. (Conway, AR) beats First Community on 14 of the 17 factors compared between the two stocks.

About First Community

(Get Free Report)

First Community Corporation operates as the bank holding company for First Community Bank that provides various commercial and retail banking products and services to small-to-medium sized businesses, professionals, and individuals. The company operates through Commercial and Retail Banking, Mortgage Banking, and Investment Advisory and Non-Deposit segments. Its deposit products include checking, NOW, savings, and individual retirement accounts; and demand deposits, as well as other time deposits, such as daily money market accounts and longer-term certificates of deposit. The company's loan portfolio comprises commercial loans that include secured and unsecured loans for working capital, business expansion, and the purchase of equipment and machinery; consumer loans, including secured and unsecured loans for financing automobiles, home improvements, education, and personal investments; real estate construction and acquisition loans; and fixed and variable rate mortgage loans. It also provides online banking, internet banking, cash management, safe deposit boxes, direct deposit of payroll and social security checks, and automatic drafts for various accounts. In addition, the company offers non-deposit investment products and other investment brokerage services; VISA and MasterCard credit card services; investment advisory services; and insurance services. The company was incorporated in 1994 and is headquartered in Lexington, South Carolina.

About Home Bancshares, Inc. (Conway, AR)

(Get Free Report)

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.

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