Boston Private Financial (NASDAQ:BPFH) and Home Bancshares (NASDAQ:HOMB) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, profitability, earnings and valuation.
Insider and Institutional Ownership
94.7% of Boston Private Financial shares are held by institutional investors. Comparatively, 66.3% of Home Bancshares shares are held by institutional investors. 2.1% of Boston Private Financial shares are held by insiders. Comparatively, 9.2% of Home Bancshares shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
This is a breakdown of recent recommendations for Boston Private Financial and Home Bancshares, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Boston Private Financial||0||1||0||0||2.00|
Boston Private Financial currently has a consensus price target of $15.00, suggesting a potential upside of 30.21%. Home Bancshares has a consensus price target of $25.60, suggesting a potential upside of 35.45%. Given Home Bancshares’ stronger consensus rating and higher possible upside, analysts plainly believe Home Bancshares is more favorable than Boston Private Financial.
Risk and Volatility
Boston Private Financial has a beta of 0.98, meaning that its share price is 2% less volatile than the S&P 500. Comparatively, Home Bancshares has a beta of 1.17, meaning that its share price is 17% more volatile than the S&P 500.
Earnings & Valuation
This table compares Boston Private Financial and Home Bancshares’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Boston Private Financial||$311.29 million||3.12||$80.38 million||$0.97||11.88|
|Home Bancshares||$788.20 million||4.15||$300.40 million||$1.75||10.80|
Home Bancshares has higher revenue and earnings than Boston Private Financial. Home Bancshares is trading at a lower price-to-earnings ratio than Boston Private Financial, indicating that it is currently the more affordable of the two stocks.
This table compares Boston Private Financial and Home Bancshares’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Boston Private Financial||18.89%||11.04%||0.97%|
Boston Private Financial pays an annual dividend of $0.48 per share and has a dividend yield of 4.2%. Home Bancshares pays an annual dividend of $0.48 per share and has a dividend yield of 2.5%. Boston Private Financial pays out 49.5% of its earnings in the form of a dividend. Home Bancshares pays out 27.4% 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. Boston Private Financial has increased its dividend for 6 consecutive years and Home Bancshares has increased its dividend for 8 consecutive years.
Home Bancshares beats Boston Private Financial on 14 of the 17 factors compared between the two stocks.
About Boston Private Financial
Boston Private Financial Holdings, Inc. operates as the bank holding company for Boston Private Bank & Trust Company that provides a range of banking services in the United States. The company operates through four segments: Private Banking, Wealth Management and Trust, Investment Management, and Wealth Advisory. The Private Banking segment offers private banking services to high net worth individuals, privately-owned businesses and partnerships, and nonprofit organizations; and financing services for affordable housing, first-time homebuyers, economic development, social services, community revitalization, and small businesses. It provides various deposit products. This segment also offers loans to individuals, such as residential mortgage loans, mortgage loans on investment or vacation properties, unsecured and secured personal lines of credits, home equity loans, and overdraft protection; and loans to businesses consisting of commercial and mortgage loans, revolving lines of credit, working capital loans, equipment financing, community lending programs, and construction and land loans. The Wealth Management and Trust segment provides wealth management solutions, including customized investment, wealth planning, trust, and family office services to high net worth individuals and families. The Investment Management segment offers services for pension funds, endowments, trusts, foundations and select institutions, mutual funds, and high net worth individuals and their families. The Wealth Advisory segment provides financial, estate and insurance, charitable, and intergenerational gifting and succession planning, as well as tax planning and preparation services. As of January 2, 2018, the company had offices in Boston, New York, Los Angeles, San Francisco, San Jose, Florida, and Wisconsin. Boston Private Financial Holdings, Inc. was incorporated in 1987 and is headquartered in Boston, Massachusetts.
About Home Bancshares
Home Bancshares, Inc. (Conway, AR) operates as the bank holding company for Centennial Bank that provides commercial and retail banking, and related financial services to businesses, real estate developers and investors, individuals, and municipalities. Its deposit products include checking, savings, NOW, and money market accounts, as well as certificates of deposit. The company's loan portfolio comprises non-farm/non-residential real estate, construction/land development, residential mortgage, consumer, agricultural, and commercial and industrial loans. It also provides Internet banking, mobile banking, voice response information, cash management, overdraft protection, direct deposit, and automatic account transfer services, as well as safe deposit boxes and the United States savings bonds. In addition, the company writes policies for commercial and personal lines of business, including insurance for property, casualty, life, health, and employee benefits. As of December 31, 2017, it operated through 170 branch locations, including 76 branches in Arkansas, 88 branches in Florida, 5 branches in Alabama, and 1 branch in New York City. Home Bancshares, Inc. (Conway, AR) was founded in 1998 and is headquartered in Conway, Arkansas.
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