Financial Analysis: Home Bancorp (NASDAQ:HBCP) & First National (NASDAQ:FXNC)

Home Bancorp (NASDAQ:HBCP) and First National (NASDAQ:FXNC) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, profitability, risk, earnings, valuation and institutional ownership.

Profitability

This table compares Home Bancorp and First National’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Home Bancorp	20.09%	10.34%	1.19%
First National	7.29%	10.53%	0.89%

Valuation & Earnings

This table compares Home Bancorp and First National”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Home Bancorp	$142.11 million	3.00	$36.43 million	$5.21	10.45
First National	$92.70 million	2.18	$6.97 million	$1.00	22.46

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

Risk & Volatility

Home Bancorp has a beta of 0.62, suggesting that its share price is 38% less volatile than the S&P 500. Comparatively, First National has a beta of 0.55, suggesting that its share price is 45% less volatile than the S&P 500.

Institutional and Insider Ownership

49.4% of Home Bancorp shares are owned by institutional investors. Comparatively, 33.9% of First National shares are owned by institutional investors. 7.9% of Home Bancorp shares are owned by insiders. Comparatively, 14.3% of First National shares are owned 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.

Dividends

Home Bancorp pays an annual dividend of $1.16 per share and has a dividend yield of 2.1%. First National pays an annual dividend of $0.62 per share and has a dividend yield of 2.8%. Home Bancorp pays out 22.3% of its earnings in the form of a dividend. First National pays out 62.0% 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. Home Bancorp has raised its dividend for 10 consecutive years and First National has raised its dividend for 10 consecutive years.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Home Bancorp and First National, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Home Bancorp	0	2	3	0	2.60
First National	0	3	0	0	2.00

Home Bancorp presently has a consensus price target of $59.50, indicating a potential upside of 9.27%. First National has a consensus price target of $28.50, indicating a potential upside of 26.89%. Given First National’s higher probable upside, analysts plainly believe First National is more favorable than Home Bancorp.

Summary

Home Bancorp beats First National on 11 of the 16 factors compared between the two stocks.

About Home Bancorp

Home Bancorp, Inc. operates as the bank holding company for Home Bank, National Association that provides various banking products and services in Louisiana, Mississippi, and Texas. It offers deposit products, including interest-bearing and noninterest-bearing checking, money market, savings, NOW, and certificates of deposit accounts. The company also provides various loan products comprising one-to four-family first mortgage loans, home equity loans and lines, commercial real estate loans, construction and land loans, multi-family residential loans, commercial and industrial loans, and consumer loans. In addition, it invests in securities; and offers credit cards and online banking services. Home Bancorp, Inc. was founded in 1908 and is headquartered in Lafayette, Louisiana.

About First National

First National Corporation operates as the bank holding company for First Bank that provides various commercial banking services to small and medium-sized businesses, individuals, estates, local governmental entities, and non-profit organizations in Virginia. The company's deposit products include checking, savings, money market, and individual retirement accounts, as well as certificates of deposit and treasury management solutions. Its loan products comprise construction loans, including residential, land acquisition, and development loans; 1-4 family residential real estate loans; and commercial real estate loans that are secured by commercial real estate, including multi-family residential buildings, office and retail buildings, hotels, industrial buildings, and religious facilities. In addition, the company's loan products include commercial and industrial loans that are secured by business assets, such as accounts receivable, equipment, and inventory; home equity loans; and secured and unsecured consumer loans, such as lines of credit, automobile loans, deposit account loans, and installment and demand loans. Further, it provides wealth management services, including estate planning, investment management of assets, trustee under an agreement, trustee under a will, and estate settlement. Additionally, the company offers title insurance and investment services; and holds other real estate owned and office sites, as well as provides internet and mobile banking, remote deposit capture, and other traditional banking services. First National Corporation was founded in 1907 and is headquartered in Strasburg, Virginia.