Head-To-Head Review: Home BancShares (NYSE:HOMB) & UMB Financial (NASDAQ:UMBF)

Home BancShares (NYSE:HOMB – Get Free Report) and UMB Financial (NASDAQ:UMBF – Get Free Report) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, analyst recommendations, dividends, institutional ownership, earnings, valuation and profitability.

Valuation & Earnings

This table compares Home BancShares and UMB Financial”s revenue, earnings per share (EPS) and valuation.

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

Institutional & Insider Ownership

67.3% of Home BancShares shares are held by institutional investors. Comparatively, 87.8% of UMB Financial shares are held by institutional investors. 6.4% of Home BancShares shares are held by company insiders. Comparatively, 5.3% of UMB Financial shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Home BancShares and UMB Financial’s net margins, return on equity and return on assets.

Analyst Recommendations

This is a breakdown of current recommendations for Home BancShares and UMB Financial, as reported by MarketBeat.

Home BancShares presently has a consensus price target of $33.00, suggesting a potential upside of 9.80%. UMB Financial has a consensus price target of $167.93, suggesting a potential upside of 22.61%. Given UMB Financial’s stronger consensus rating and higher probable upside, analysts plainly believe UMB Financial is more favorable than Home BancShares.

Volatility & Risk

Home BancShares has a beta of 0.67, indicating that its share price is 33% less volatile than the S&P 500. Comparatively, UMB Financial has a beta of 0.77, indicating that its share price is 23% less volatile than the S&P 500.

Dividends

Home BancShares pays an annual dividend of $0.92 per share and has a dividend yield of 3.1%. UMB Financial pays an annual dividend of $2.00 per share and has a dividend yield of 1.5%. Home BancShares pays out 38.0% of its earnings in the form of a dividend. UMB Financial pays out 16.7% 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 BancShares has increased its dividend for 15 consecutive years and UMB Financial has increased its dividend for 32 consecutive years.

Summary

UMB Financial beats Home BancShares on 12 of the 18 factors compared between the two stocks.

About Home BancShares

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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, 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 provides internet banking, mobile banking and 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. It operates through branches in Arkansas, Florida, Alabama, Texas, and New York City. Home Bancshares, Inc. (Conway, AR) was founded in 1998 and is headquartered in Conway, Arkansas.

About UMB Financial

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UMB Financial Corporation operates as the bank holding company that provides banking services and asset servicing in the United States and internationally. The Commercial Banking segment provides commercial loans and credit card; commercial real estate financing; letters of credit; loan syndication, and consultative service; various business solutions including asset-based lending, mezzanine debt, and minority equity investment; and treasury management service, such as depository service, account reconciliation, cash management tool, accounts payable and receivable solution, electronic fund transfer and automated payment, controlled disbursement, lockbox service, and remote deposit capture service. The Institutional Banking segment offers fund, asset management, and healthcare service to institutional clients; and fund administration and accounting, investor service and transfer agency, mutual fund service, alternative investment service, fixed income sale, trading and underwriting, and corporate trust and escrow service, as well as institutional custody service. This segment also provides healthcare payment solution includes custodial service for health saving accounts and private label, multipurpose debit cards to insurance carriers, third-party administrator, software companies, employers, and financial institutions. The Personal Banking segment offers deposit account, retail credit card, private banking, installment loan, home equity line of credit, residential mortgage, as well as internet banking, ATM network, private banking, brokerage and insurance service, and investment advisory, custody, and trust services. It operates through a network of branches and offices. The company was founded in 1913 and is headquartered in Kansas City, Missouri.

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