Contrasting Home BancShares (NYSE:HOMB) and Texas Community Bancshares (NASDAQ:TCBS)

Home BancShares (NYSE:HOMB) and Texas Community Bancshares (NASDAQ:TCBS) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, dividends, profitability, earnings, analyst recommendations, risk and valuation.

Earnings and Valuation

This table compares Home BancShares and Texas Community Bancshares”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Home BancShares	$1.48 billion	3.89	$475.44 million	$2.43	11.74
Texas Community Bancshares	$25.57 million	1.97	$2.84 million	$1.09	15.96

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

Volatility and Risk

Home BancShares has a beta of 0.68, indicating that its stock price is 32% less volatile than the S&P 500. Comparatively, Texas Community Bancshares has a beta of -0.03, indicating that its stock price is 103% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for Home BancShares and Texas Community Bancshares, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Home BancShares	0	5	2	0	2.29
Texas Community Bancshares	0	1	0	0	2.00

Home BancShares presently has a consensus target price of $31.20, suggesting a potential upside of 9.35%. Given Home BancShares’ stronger consensus rating and higher probable upside, research analysts clearly believe Home BancShares is more favorable than Texas Community Bancshares.

Insider & Institutional Ownership

67.3% of Home BancShares shares are owned by institutional investors. Comparatively, 15.8% of Texas Community Bancshares shares are owned by institutional investors. 6.4% of Home BancShares shares are owned by insiders. Comparatively, 15.3% of Texas Community Bancshares shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Home BancShares	32.48%	11.11%	2.05%
Texas Community Bancshares	11.79%	5.66%	0.70%

Dividends

Home BancShares pays an annual dividend of $0.84 per share and has a dividend yield of 2.9%. Texas Community Bancshares pays an annual dividend of $0.24 per share and has a dividend yield of 1.4%. Home BancShares pays out 34.6% of its earnings in the form of a dividend. Texas Community Bancshares pays out 22.0% 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 BancShares has raised its dividend for 15 consecutive years and Texas Community Bancshares has raised its dividend for 1 consecutive years. Home BancShares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Home BancShares beats Texas Community Bancshares on 14 of the 17 factors compared between the two stocks.

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.

About Texas Community Bancshares

Texas Community Bancshares, Inc. operates as the bank holding company for Mineola Community Bank, S.S.B. that provides loans and banking services to consumers and commercial customers in Mineola, Texas and the surrounding area, and the Dallas Fort Worth Metroplex. It generates a selection of deposit accounts, including savings accounts, checking accounts, certificates of deposit, and individual retirement accounts. The company also originates primarily one- to four-family residential mortgage loans, commercial real estate loans, and construction and land loans; and car, boat, share, unsecured loans, etc., as well as agricultural loans, commercial loans, and consumer and other loans. In addition, it invests in securities; and offers sweep account, safe deposit boxes, e-statement, cards, online banking, and mobile banking services. Texas Community Bancshares, Inc. was founded in 1934 and is headquartered in Mineola, Texas.