Home BancShares (NASDAQ: HOMB) and DNB Financial (NASDAQ:DNBF) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, valuation, earnings, institutional ownership, analyst recommendations, risk and dividends.
Insider & Institutional Ownership
63.5% of Home BancShares shares are owned by institutional investors. Comparatively, 30.7% of DNB Financial shares are owned by institutional investors. 11.3% of Home BancShares shares are owned by company insiders. Comparatively, 18.4% of DNB Financial shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
This table compares Home BancShares and DNB Financial’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Home BancShares||$523.59 million||7.71||$177.14 million||$1.13||20.58|
|DNB Financial||$33.89 million||4.25||$4.97 million||$2.21||15.25|
Home BancShares has higher revenue and earnings than DNB Financial. DNB Financial is trading at a lower price-to-earnings ratio than Home BancShares, indicating that it is currently the more affordable of the two stocks.
This table compares Home BancShares and DNB Financial’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a breakdown of current ratings and target prices for Home BancShares and DNB Financial, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Home BancShares currently has a consensus target price of $27.75, indicating a potential upside of 19.35%. DNB Financial has a consensus target price of $37.00, indicating a potential upside of 9.79%. Given Home BancShares’ stronger consensus rating and higher probable upside, equities research analysts plainly believe Home BancShares is more favorable than DNB Financial.
Home BancShares pays an annual dividend of $0.44 per share and has a dividend yield of 1.9%. DNB Financial pays an annual dividend of $0.28 per share and has a dividend yield of 0.8%. Home BancShares pays out 38.9% of its earnings in the form of a dividend. DNB Financial pays out 12.7% 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.
Risk & Volatility
Home BancShares has a beta of 1.17, meaning that its stock price is 17% more volatile than the S&P 500. Comparatively, DNB Financial has a beta of 0.31, meaning that its stock price is 69% less volatile than the S&P 500.
Home BancShares beats DNB Financial on 13 of the 16 factors compared between the two stocks.
Home BancShares Company Profile
Home BancShares, Inc. is a bank holding company. The Company is engaged in providing a range of commercial and retail banking, and related financial services to businesses, real estate developers and investors, individuals and municipalities through its community bank subsidiary, Centennial Bank (the Bank). It operates through community banking segment. It offers a range of products and services, including Internet banking, mobile banking and voice response information, cash management, overdraft protection, direct deposit, safe deposit boxes, the United States savings bonds and automatic account transfers. The Bank has locations in Arkansas, Florida, South Alabama and New York City. As of September 26, 2017, the Company conducted business principally through 76 branches in Arkansas, 89 branches in Florida, six branches in Alabama and one branch in New York City. It originates loans secured by single and multi-family real estate, residential construction and commercial buildings.
DNB Financial Company Profile
DNB Financial Corporation is a bank holding company for DNB First, National Association (the Bank). The Company operates through the Community Banking segment. The Bank is a commercial bank providing a range of services to individuals and small to medium sized businesses in the southeastern Pennsylvania market area, including accepting time, demand and savings deposits, and making secured and unsecured commercial, real estate and consumer loans. In addition, the Bank has over 10 branches and a wealth management group, DNB First Wealth Management. Its loan and lease portfolio consists primarily of commercial and residential real estate loans, commercial loans and lines of credit (including commercial construction), commercial leases and consumer loans. Its investment portfolio includes the United States agency securities, bank stocks, and other bonds and notes. Its primary source of funds is derived from customer deposits, which are typically generated by its branch offices.
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