Head to Head Analysis: First Guaranty Bancshares (NASDAQ:FGBI) versus Home Bancorp (NASDAQ:HBCP)

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

Institutional and Insider Ownership

39.5% of First Guaranty Bancshares shares are held by institutional investors. Comparatively, 49.4% of Home Bancorp shares are held by institutional investors. 47.2% of First Guaranty Bancshares shares are held by insiders. Comparatively, 7.9% of Home Bancorp shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Guaranty Bancshares	2	0	0	0	1.00
Home Bancorp	0	1	3	1	3.00

Home Bancorp has a consensus target price of $59.50, indicating a potential upside of 12.11%. Given Home Bancorp’s stronger consensus rating and higher possible upside, analysts plainly believe Home Bancorp is more favorable than First Guaranty Bancshares.

Earnings and Valuation

This table compares First Guaranty Bancshares and Home Bancorp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Guaranty Bancshares	$99.45 million	0.94	$12.45 million	($1.01)	-6.12
Home Bancorp	$145.88 million	2.85	$36.43 million	$5.62	9.44

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
First Guaranty Bancshares	-4.49%	-4.73%	-0.27%
Home Bancorp	21.32%	11.01%	1.28%

Volatility & Risk

First Guaranty Bancshares has a beta of 0.37, indicating that its stock price is 63% less volatile than the S&P 500. Comparatively, Home Bancorp has a beta of 0.62, indicating that its stock price is 38% less volatile than the S&P 500.

Dividends

First Guaranty Bancshares pays an annual dividend of $0.04 per share and has a dividend yield of 0.6%. Home Bancorp pays an annual dividend of $1.24 per share and has a dividend yield of 2.3%. First Guaranty Bancshares pays out -4.0% 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.

Summary

Home Bancorp beats First Guaranty Bancshares on 16 of the 18 factors compared between the two stocks.

About First Guaranty Bancshares

First Guaranty Bancshares, Inc. operates as the holding company for First Guaranty Bank that provides commercial banking services in Louisiana and Texas. It offers various deposit products, including personal and business checking, savings, money market, and demand accounts, as well as time deposits to consumers, small businesses, and municipalities. The company provides loans, such as non-farm, non-residential loans secured by real estate, commercial and industrial loans, one- to four-family residential loans, multifamily loans, construction and land development loans, agricultural loans, farmland loans, and consumer and other loans to small to medium-sized businesses and professionals, and individuals. In addition, it offers a range of consumer services, including credit cards, mobile deposit capture, safe deposit boxes, official checks, online and mobile banking, automated teller machines, and online bill pay; provides additional solutions, such as merchant services, remote deposit capture, and lockbox services to business customers; and invests a portion of its assets in securities issued by the United States Government and its agencies, state and municipal obligations, corporate debt securities, mutual funds, and equity securities, as well as invests in mortgage-backed securities primarily issued or guaranteed by United States Government agencies or enterprises. First Guaranty Bancshares, Inc. was founded in 1934 and is headquartered in Hammond, 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.