Head-To-Head Comparison: Independent Bank Group (IBTX) and Home BancShares (HOMB)
Independent Bank Group (NASDAQ: IBTX) and Home BancShares (NASDAQ:HOMB) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, profitability, risk, valuation, earnings, institutional ownership and dividends.
Institutional and Insider Ownership
46.5% of Independent Bank Group shares are owned by institutional investors. Comparatively, 49.8% of Home BancShares shares are owned by institutional investors. 7.7% of Independent Bank Group shares are owned by insiders. Comparatively, 11.3% of Home BancShares shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Earnings & Valuation
This table compares Independent Bank Group and Home BancShares’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Independent Bank Group||$226.55 million||7.52||$84.48 million||$3.04||20.16|
|Home BancShares||$500.41 million||7.33||$191.74 million||$1.34||19.13|
Home BancShares has higher revenue and earnings than Independent Bank Group. Home BancShares is trading at a lower price-to-earnings ratio than Independent Bank Group, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Independent Bank Group has a beta of 1.29, meaning that its share price is 29% more volatile than the S&P 500. Comparatively, Home BancShares has a beta of 1.19, meaning that its share price is 19% more volatile than the S&P 500.
This table compares Independent Bank Group and Home BancShares’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Independent Bank Group||23.52%||8.43%||1.05%|
Independent Bank Group pays an annual dividend of $0.40 per share and has a dividend yield of 0.7%. Home BancShares pays an annual dividend of $0.44 per share and has a dividend yield of 1.7%. Independent Bank Group pays out 13.2% of its earnings in the form of a dividend. Home BancShares pays out 32.8% 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.
This is a breakdown of current ratings and price targets for Independent Bank Group and Home BancShares, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Independent Bank Group||0||0||5||0||3.00|
Independent Bank Group currently has a consensus target price of $71.40, suggesting a potential upside of 16.48%. Home BancShares has a consensus target price of $28.70, suggesting a potential upside of 11.93%. Given Independent Bank Group’s stronger consensus rating and higher possible upside, analysts clearly believe Independent Bank Group is more favorable than Home BancShares.
Home BancShares beats Independent Bank Group on 9 of the 16 factors compared between the two stocks.
About Independent Bank Group
Independent Bank Group, Inc. is a bank holding company. Through the Company’s subsidiary, Independent Bank (the Bank), the Company provides a range of commercial banking products and services tailored to meet the needs of businesses, professionals and individuals. As of December 31, 2016, the Company operated 41 banking offices in the Dallas/North Texas area, the Austin/Central Texas area, and the Houston metropolitan area. The Company offers residential mortgages through its mortgage brokerage division. As a mortgage broker, the Company originates residential mortgages, which are sold into the secondary market shortly after closing. The Company also provides wealth management services to its customers, including investment advisory and other related services. The Company offers a range of commercial and retail lending products to businesses, professionals and individuals. Deposits are the Company’s principal source of funds for use in lending and other general banking purposes.
About Home BancShares
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 December 31, 2016, the Company conducted business principally through 76 branches in Arkansas, 59 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.
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