Contrasting Home BancShares (NYSE:HOMB) and South Atlantic Bancshares (OTCMKTS:SABK)

South Atlantic Bancshares (OTCMKTS:SABK) and Home BancShares (NYSE:HOMB) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, dividends, profitability, institutional ownership, risk, analyst recommendations and valuation.

Insider & Institutional Ownership

13.3% of South Atlantic Bancshares shares are owned by institutional investors. Comparatively, 67.3% of Home BancShares shares are owned by institutional investors. 6.3% of Home BancShares 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.

Profitability

This table compares South Atlantic Bancshares and Home BancShares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
South Atlantic Bancshares	N/A	N/A	N/A
Home BancShares	32.18%	11.16%	2.03%

Dividends

South Atlantic Bancshares pays an annual dividend of $0.10 per share and has a dividend yield of 0.5%. Home BancShares pays an annual dividend of $0.84 per share and has a dividend yield of 3.0%. South Atlantic Bancshares pays out 4.8% 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. Home BancShares has increased 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.

Earnings & Valuation

This table compares South Atlantic Bancshares and Home BancShares”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
South Atlantic Bancshares	$102.25 million	1.56	$15.81 million	$2.10	10.12
Home BancShares	$1.48 billion	3.76	$475.44 million	$2.41	11.72

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

Analyst Recommendations

This is a summary of recent ratings and target prices for South Atlantic Bancshares and Home BancShares, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
South Atlantic Bancshares	0	0	0	1	4.00
Home BancShares	0	3	3	1	2.71

Home BancShares has a consensus target price of $32.60, suggesting a potential upside of 15.39%. Given Home BancShares’ higher probable upside, analysts plainly believe Home BancShares is more favorable than South Atlantic Bancshares.

Volatility and Risk

South Atlantic Bancshares has a beta of 0.11, indicating that its stock price is 89% less volatile than the S&P 500. Comparatively, Home BancShares has a beta of 0.8, indicating that its stock price is 20% less volatile than the S&P 500.

Summary

Home BancShares beats South Atlantic Bancshares on 15 of the 17 factors compared between the two stocks.

About South Atlantic Bancshares

South Atlantic Bancshares, Inc. operates as the bank holding company for South Atlantic Bank that provides consumer and commercial banking products and services to individuals, small businesses, and corporations in South Carolina. The company offers checking, money market, and saving accounts, as well as certificate of deposit, individual retirement, and health saving accounts; personal, auto, and recreation loans, as well as home equity and ready reserve overdraft line of credits, and commercial lending products; and credit cards. It also provides cash management and merchant card services; remote deposit capture and automated clearing house services; online, mobile, and telephone banking services; personal and business checks; mortgage products and services; and wealth management services. The company operates offices in Myrtle Beach, Carolina Forest, North Myrtle Beach, Murrells Inlet, Pawleys Island, Georgetown, Mount Pleasant, Charleston, Bluffton, Hilton Head Island, and Beaufort, South Carolina. South Atlantic Bancshares, Inc. was founded in 2007 and is headquartered in Myrtle Beach, South Carolina.

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.