Comparing HomeTrust Bancshares (NYSE:HTB) & Peoples Financial Services (NASDAQ:PFIS)

Peoples Financial Services (NASDAQ:PFIS) and HomeTrust Bancshares (NYSE:HTB) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their valuation, risk, earnings, dividends, institutional ownership, profitability and analyst recommendations.

Earnings and Valuation

This table compares Peoples Financial Services and HomeTrust Bancshares”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Peoples Financial Services	$283.67 million	2.54	$59.19 million	$8.83	8.15
HomeTrust Bancshares	$292.47 million	2.77	$64.36 million	$3.81	12.74

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

Profitability

This table compares Peoples Financial Services and HomeTrust Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Peoples Financial Services	20.66%	17.27%	1.70%
HomeTrust Bancshares	22.50%	10.88%	1.45%

Volatility and Risk

Peoples Financial Services has a beta of 0.74, meaning that its share price is 26% less volatile than the S&P 500. Comparatively, HomeTrust Bancshares has a beta of 0.79, meaning that its share price is 21% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for Peoples Financial Services and HomeTrust Bancshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Peoples Financial Services	0	2	1	0	2.33
HomeTrust Bancshares	0	2	2	1	2.80

Peoples Financial Services presently has a consensus price target of $65.50, indicating a potential downside of 9.00%. HomeTrust Bancshares has a consensus price target of $52.00, indicating a potential upside of 7.13%. Given HomeTrust Bancshares’ stronger consensus rating and higher probable upside, analysts clearly believe HomeTrust Bancshares is more favorable than Peoples Financial Services.

Institutional & Insider Ownership

31.7% of Peoples Financial Services shares are owned by institutional investors. Comparatively, 60.9% of HomeTrust Bancshares shares are owned by institutional investors. 8.2% of Peoples Financial Services shares are owned by company insiders. Comparatively, 11.0% of HomeTrust Bancshares shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Dividends

Peoples Financial Services pays an annual dividend of $2.50 per share and has a dividend yield of 3.5%. HomeTrust Bancshares pays an annual dividend of $0.60 per share and has a dividend yield of 1.2%. Peoples Financial Services pays out 28.3% of its earnings in the form of a dividend. HomeTrust Bancshares pays out 15.7% 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. Peoples Financial Services has raised its dividend for 8 consecutive years. Peoples Financial Services is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

HomeTrust Bancshares beats Peoples Financial Services on 13 of the 18 factors compared between the two stocks.

About Peoples Financial Services

Peoples Financial Services Corp. operates as the bank holding company for Peoples Security Bank and Trust Company that provides various commercial and retail banking services. The company accepts money market, negotiable order of withdrawal, savings, individual retirement, demand deposit, and certificates of deposit accounts. It also provides residential real estate, automobile, manufactured housing, personal, and home equity loans; and commercial real estate, working capital, construction, small business administration, and agricultural loans, as well as loans for equipment and other commercial needs, and mineral rights. In addition, the company offers fiduciary and investment services; investment management, IRA trustee, estate administration, living and life insurance trust, trustee under will, guardianship, custodial/IRA custodial, and corporate trust services, as well as pension and profit-sharing plans. Further, it provides wealth management products and services comprising investment portfolio management, estate and business succession planning, annuities, insurance, retirement plan, and tax planning, as well as education funding strategies; and securities, brokerage, and investor services. Additionally, the company offers small business checking and merchant money market accounts, online and telephone banking, business credit cards, merchant line of credit, and financial checkup services; and remote deposit capture, automatic clearing house transaction, cash management, automated teller machine, point of sale transaction, safe deposit box, night depository, direct deposit, and official check services. It serves business, non-profit, governmental, municipal agency, and professional customers, as well as retail customers. Peoples Financial Services Corp. was founded in 1905 and is headquartered in Scranton, Pennsylvania.

About HomeTrust Bancshares

HomeTrust Bancshares, Inc. operates as the bank holding company for HomeTrust Bank that provides a range of retail and commercial banking products and services. Its deposit products include savings, money market, and demand accounts, as well as certificates of deposit for individuals, businesses, and nonprofit organizations. The company’s loan portfolio comprises retail consumer loans, such as one-to-four-family real estate lending, home equity lines of credit, construction and land/lots, indirect auto finance, and consumer lending; and commercial loans that include commercial real estate, construction and development, and commercial and industrial loans. It also provides small business administration loans, equipment finance leases, indirect automobile loans, and municipal leases; and cash management and online/mobile banking services. As of June 30, 2021, the company operated 41 offices in North Carolina, Upstate South Carolina, East Tennessee, and Southwest Virginia. HomeTrust Bancshares, Inc. was founded in 1926 and is headquartered in Asheville, North Carolina.