Head to Head Analysis: First Bancorp (NASDAQ:FBNC) vs. Home Bancorp (NASDAQ:HBCP)

First Bancorp (NASDAQ:FBNC) and Home Bancorp (NASDAQ:HBCP) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, risk, analyst recommendations, earnings, valuation, profitability and institutional ownership.

Dividends

First Bancorp pays an annual dividend of $0.92 per share and has a dividend yield of 1.8%. Home Bancorp pays an annual dividend of $1.24 per share and has a dividend yield of 2.3%. First Bancorp pays out 38.7% of its earnings in the form of a dividend. Home Bancorp pays out 22.1% 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. Home Bancorp has raised its dividend for 10 consecutive years. Home Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
First Bancorp	17.50%	9.61%	1.18%
Home Bancorp	21.32%	11.01%	1.28%

Earnings and Valuation

This table compares First Bancorp and Home Bancorp”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Bancorp	$365.95 million	5.71	$76.21 million	$2.38	21.18
Home Bancorp	$145.88 million	2.95	$36.43 million	$5.62	9.77

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

Institutional and Insider Ownership

68.4% of First Bancorp shares are held by institutional investors. Comparatively, 49.4% of Home Bancorp shares are held by institutional investors. 3.7% of First Bancorp shares are held by company insiders. Comparatively, 7.9% of Home Bancorp shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility & Risk

First Bancorp has a beta of 1.06, indicating that its stock price is 6% more volatile than the S&P 500. Comparatively, Home Bancorp has a beta of 0.63, indicating that its stock price is 37% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and price targets for First Bancorp and Home Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Bancorp	0	3	2	1	2.67
Home Bancorp	0	1	3	1	3.00

First Bancorp currently has a consensus target price of $56.67, indicating a potential upside of 12.43%. Home Bancorp has a consensus target price of $59.50, indicating a potential upside of 8.36%. Given First Bancorp’s higher probable upside, research analysts plainly believe First Bancorp is more favorable than Home Bancorp.

Summary

Home Bancorp beats First Bancorp on 10 of the 17 factors compared between the two stocks.

About First Bancorp

First Bancorp operates as the bank holding company for First Bank that provides banking products and services for individuals and small to medium-sized businesses. The company accepts deposit products, such as checking, savings, and money market accounts, as well as time deposits, including certificate of deposits and individual retirement accounts. It also offers loans for a range of consumer and commercial purposes comprising loans for business, real estate, personal, home improvement, and automobiles, as well as residential mortgages and small business administration loans; and accounts receivable financing and factoring, inventory financing, and purchase order financing services. In addition, the company provides credit and debit cards, letter of credits, and safe deposit box rental services, as well as electronic funds transfer services consisting of wire transfers; and internet and mobile banking, cash management, bank-by-phone services, and remote deposit capture services. Further, it offers investment and insurance products, such as mutual funds, annuities, long-term care insurance, life insurance, and company retirement plans, as well as property and casualty insurance products; and financial planning services. The company was founded in 1934 and is headquartered in Southern Pines, North Carolina.

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.