Financial Analysis: Auburn National Bancorporation (NASDAQ:AUBN) and Home Bancorp (NASDAQ:HBCP)

Auburn National Bancorporation (NASDAQ:AUBN) and Home Bancorp (NASDAQ:HBCP) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, analyst recommendations, risk, institutional ownership, profitability and earnings.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Auburn National Bancorporation	18.60%	9.10%	0.81%
Home Bancorp	21.05%	10.01%	1.25%

Risk & Volatility

Auburn National Bancorporation has a beta of 0.43, indicating that its share price is 57% less volatile than the S&P 500. Comparatively, Home Bancorp has a beta of 0.52, indicating that its share price is 48% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings for Auburn National Bancorporation and Home Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Auburn National Bancorporation	0	1	0	0	2.00
Home Bancorp	0	3	1	1	2.60

Home Bancorp has a consensus target price of $65.17, indicating a potential upside of 6.07%. Given Home Bancorp’s stronger consensus rating and higher possible upside, analysts clearly believe Home Bancorp is more favorable than Auburn National Bancorporation.

Insider & Institutional Ownership

39.5% of Auburn National Bancorporation shares are owned by institutional investors. Comparatively, 49.4% of Home Bancorp shares are owned by institutional investors. 18.7% of Auburn National Bancorporation shares are owned by insiders. Comparatively, 6.2% of Home Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

Auburn National Bancorporation pays an annual dividend of $1.08 per share and has a dividend yield of 4.1%. Home Bancorp pays an annual dividend of $1.28 per share and has a dividend yield of 2.1%. Auburn National Bancorporation pays out 44.8% of its earnings in the form of a dividend. Home Bancorp pays out 22.6% 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 Bancorp has increased its dividend for 10 consecutive years.

Earnings and Valuation

This table compares Auburn National Bancorporation and Home Bancorp”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Auburn National Bancorporation	$34.26 million	2.69	$7.26 million	$2.41	10.98
Home Bancorp	$156.11 million	3.09	$46.06 million	$5.67	10.84

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

Summary

Home Bancorp beats Auburn National Bancorporation on 15 of the 18 factors compared between the two stocks.

About Auburn National Bancorporation

Auburn National Bancorporation, Inc. operates as the bank holding company for AuburnBank that provides various banking products and services in East Alabama. The company offers checking, savings, and transaction deposit accounts, as well as certificates of deposit. It also provides commercial, financial, agricultural, real estate construction, and consumer loan products; and other financial services. In addition, the company offers automated teller services; debit cards; online banking, bill payment, and other electronic banking services; and safe deposit boxes. Auburn National Bancorporation, Inc. was founded in 1907 and is headquartered in Auburn, Alabama.

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.