Head to Head Analysis: Home Bancorp (NASDAQ:HBCP) vs. Hilltop (NYSE:HTH)

Hilltop (NYSE:HTH) and Home Bancorp (NASDAQ:HBCP) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their dividends, profitability, valuation, institutional ownership, risk, earnings and analyst recommendations.

Insider & Institutional Ownership

57.1% of Hilltop shares are held by institutional investors. Comparatively, 49.4% of Home Bancorp shares are held by institutional investors. 29.9% of Hilltop 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, endowments and large money managers believe a company will outperform the market over the long term.

Volatility and Risk

Hilltop has a beta of 0.94, indicating that its stock price is 6% less volatile than the S&P 500. Comparatively, Home Bancorp has a beta of 0.59, indicating that its stock price is 41% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Hilltop and Home Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hilltop	0	4	1	0	2.20
Home Bancorp	0	1	3	1	3.00

Hilltop currently has a consensus target price of $34.00, suggesting a potential downside of 3.28%. Home Bancorp has a consensus target price of $59.50, suggesting a potential upside of 4.08%. Given Home Bancorp’s stronger consensus rating and higher probable upside, analysts plainly believe Home Bancorp is more favorable than Hilltop.

Dividends

Hilltop pays an annual dividend of $0.72 per share and has a dividend yield of 2.0%. Home Bancorp pays an annual dividend of $1.24 per share and has a dividend yield of 2.2%. Hilltop pays out 28.7% 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. Hilltop has raised its dividend for 8 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Hilltop	9.86%	7.18%	1.01%
Home Bancorp	21.32%	10.87%	1.27%

Earnings and Valuation

This table compares Hilltop 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
Hilltop	$1.61 billion	1.34	$113.21 million	$2.51	14.01
Home Bancorp	$199.39 million	2.25	$36.43 million	$5.62	10.17

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

Summary

Home Bancorp beats Hilltop on 12 of the 18 factors compared between the two stocks.

About Hilltop

Hilltop Holdings Inc. provides business and consumer banking services. It operates through three segments: Banking, Broker-Dealer, and Mortgage Origination. The Banking segment offers savings, checking, interest-bearing checking, and money market accounts; certificates of deposit; lines and letters of credit, home improvement and equity loans, loans for purchasing and carrying securities, term, agricultural and commercial real estate, equipment loans, and other lending products; and mortgage, commercial and industrial loans, and term and construction finance. It also provides treasury management, asset management, check cards, safe deposit boxes, online banking, bill pay, and overdraft privilege services; and estate planning, management and administration, investment portfolio management, employee benefit accounts, and individual retirement accounts services, as well as automated teller machines. The Broker-Dealer segment offers public finance services that assist public entities in originating, syndicating, and distributing securities of municipalities and political subdivisions; specialized advisory and investment banking services; advice and guidance to arbitrage rebate compliance, portfolio management, and local government investment pool administration; advisory services and products for derivatives and commodities; agricultural insurance; and sells, trades in, and underwrites U.S. government and government agency bonds, corporate bonds, and municipal bonds; mortgage-backed, asset-backed, and commercial mortgage-backed securities and structured products; and provides asset and liability management advisory, clearing, retail, and securities lending services. The Mortgage Origination segment offers fixed and adjustable rate mortgages, jumbo, new construction, Federal Housing Administration, Veterans Affairs, and United States Department of Agriculture loans. Hilltop Holdings Inc. was incorporated in 1998 and is based in Dallas, Texas.

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.