Comparing Home Bancorp (NASDAQ:HBCP) and First Community (NASDAQ:FCCO)

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

Insider and Institutional Ownership

61.3% of First Community shares are owned by institutional investors. Comparatively, 49.4% of Home Bancorp shares are owned by institutional investors. 5.9% of First Community shares are owned by company insiders. Comparatively, 7.9% of Home Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
First Community	16.69%	12.70%	0.95%
Home Bancorp	21.32%	11.01%	1.28%

Earnings and Valuation

This table compares First Community and Home Bancorp”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Community	$71.89 million	3.04	$13.95 million	$2.40	11.85
Home Bancorp	$145.88 million	2.92	$36.43 million	$5.62	9.68

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

Analyst Ratings

This is a summary of current ratings and recommmendations for First Community and Home Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Community	0	1	3	1	3.00
Home Bancorp	0	1	3	1	3.00

First Community presently has a consensus price target of $29.67, suggesting a potential upside of 4.31%. Home Bancorp has a consensus price target of $59.50, suggesting a potential upside of 9.36%. Given Home Bancorp’s higher possible upside, analysts plainly believe Home Bancorp is more favorable than First Community.

Dividends

First Community pays an annual dividend of $0.64 per share and has a dividend yield of 2.3%. Home Bancorp pays an annual dividend of $1.24 per share and has a dividend yield of 2.3%. First Community pays out 26.7% 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. First Community has raised its dividend for 4 consecutive years and 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.

Risk and Volatility

First Community has a beta of 0.51, suggesting that its share price is 49% less volatile than the S&P 500. Comparatively, Home Bancorp has a beta of 0.63, suggesting that its share price is 37% less volatile than the S&P 500.

Summary

Home Bancorp beats First Community on 11 of the 15 factors compared between the two stocks.

About First Community

First Community Corporation operates as the bank holding company for First Community Bank that provides various commercial and retail banking products and services to small-to-medium sized businesses, professionals, and individuals. The company operates through Commercial and Retail Banking, Mortgage Banking, and Investment Advisory and Non-Deposit segments. Its deposit products include checking, NOW, savings, and individual retirement accounts; and demand deposits, as well as other time deposits, such as daily money market accounts and longer-term certificates of deposit. The company's loan portfolio comprises commercial loans that include secured and unsecured loans for working capital, business expansion, and the purchase of equipment and machinery; consumer loans, including secured and unsecured loans for financing automobiles, home improvements, education, and personal investments; real estate construction and acquisition loans; and fixed and variable rate mortgage loans. It also provides online banking, internet banking, cash management, safe deposit boxes, direct deposit of payroll and social security checks, and automatic drafts for various accounts. In addition, the company offers non-deposit investment products and other investment brokerage services; VISA and MasterCard credit card services; investment advisory services; and insurance services. The company was incorporated in 1994 and is headquartered in Lexington, South Carolina.

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.