Analyzing Investar (NASDAQ:ISTR) & Home Bancorp (NASDAQ:HBCP)

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

Insider & Institutional Ownership

50.2% of Investar shares are owned by institutional investors. Comparatively, 49.4% of Home Bancorp shares are owned by institutional investors. 8.8% of Investar shares are owned by insiders. Comparatively, 7.9% of Home Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Investar	$158.07 million	1.71	$20.25 million	$2.24	12.31
Home Bancorp	$199.39 million	2.39	$36.43 million	$5.62	10.82

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

Analyst Recommendations

This is a breakdown of recent recommendations for Investar and Home Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Investar	0	1	2	0	2.67
Home Bancorp	0	2	3	0	2.60

Investar presently has a consensus target price of $29.00, suggesting a potential upside of 5.19%. Home Bancorp has a consensus target price of $59.50, suggesting a potential downside of 2.19%. Given Investar’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Investar is more favorable than Home Bancorp.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Investar	14.87%	9.38%	0.86%
Home Bancorp	21.32%	10.87%	1.27%

Volatility & Risk

Investar has a beta of 0.54, meaning that its share price is 46% less volatile than the S&P 500. Comparatively, Home Bancorp has a beta of 0.6, meaning that its share price is 40% less volatile than the S&P 500.

Dividends

Investar pays an annual dividend of $0.44 per share and has a dividend yield of 1.6%. Home Bancorp pays an annual dividend of $1.24 per share and has a dividend yield of 2.0%. Investar pays out 19.6% 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. Investar has raised its dividend for 10 consecutive years and Home Bancorp has raised its dividend for 10 consecutive years.

Summary

Home Bancorp beats Investar on 10 of the 16 factors compared between the two stocks.

About Investar

Investar Holding Corporation operates as the bank holding company for Investar Bank that provides a range of commercial banking products to individuals, professionals, and small to medium-sized businesses in south Louisiana, southeast Texas, and Alabama in the United States. The company offers various deposit products and services, such as savings, checking, money market, and individual retirement accounts, as well as various certificates of deposit; debit and credit cards; internet, mobile, and video banking services; and reciprocal deposit products. It also provides commercial real estate loans; commercial and industrial loans, including working capital lines of credit and equipment loans; loans for the construction of commercial projects, and single family residential and multifamily properties; one-to-four family residential real estate loans, such as second mortgage loans; and consumer loans, such as secured and unsecured installment and term loans, home equity loans and lines of credit, and auto loans, as well as loans for personal, family, and household purposes. In addition, the company offers treasury management products, including remote deposit capture, lockbox payment processing, virtual vault, positive pay, ACH origination, wire transfer, investment sweep accounts, and business internet banking services. Further, it provides various other banking services, such as cashiers' checks, direct deposit of payroll and social security checks, night depository, bank-by-mail, automated teller machines, electronic statements, interactive teller machines, online account opening, and mobile wallet payment services. Investar Holding Corporation was founded in 2006 and is headquartered in Baton Rouge, Louisiana.

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.