Critical Analysis: Western Alliance Bancorporation (NYSE:WAL) & Home Federal Bancorp, Inc. of Louisiana (NASDAQ:HFBL)

Home Federal Bancorp, Inc. of Louisiana (NASDAQ:HFBL) and Western Alliance Bancorporation (NYSE:WAL) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, institutional ownership, analyst recommendations, dividends, valuation, earnings and profitability.

Insider and Institutional Ownership

21.1% of Home Federal Bancorp, Inc. of Louisiana shares are owned by institutional investors. Comparatively, 79.2% of Western Alliance Bancorporation shares are owned by institutional investors. 19.4% of Home Federal Bancorp, Inc. of Louisiana shares are owned by company insiders. Comparatively, 2.8% of Western Alliance Bancorporation shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Home Federal Bancorp, Inc. of Louisiana and Western Alliance Bancorporation”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Home Federal Bancorp, Inc. of Louisiana	$35.17 million	2.10	$6.17 million	$2.00	12.08
Western Alliance Bancorporation	$3.87 billion	2.10	$969.00 million	$8.88	8.37

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

Profitability

This table compares Home Federal Bancorp, Inc. of Louisiana and Western Alliance Bancorporation’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Home Federal Bancorp, Inc. of Louisiana	17.56%	10.69%	0.98%
Western Alliance Bancorporation	17.20%	13.40%	1.07%

Dividends

Home Federal Bancorp, Inc. of Louisiana pays an annual dividend of $0.60 per share and has a dividend yield of 2.5%. Western Alliance Bancorporation pays an annual dividend of $1.68 per share and has a dividend yield of 2.3%. Home Federal Bancorp, Inc. of Louisiana pays out 30.0% of its earnings in the form of a dividend. Western Alliance Bancorporation pays out 18.9% 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 Federal Bancorp, Inc. of Louisiana has increased its dividend for 11 consecutive years and Western Alliance Bancorporation has increased its dividend for 5 consecutive years. Home Federal Bancorp, Inc. of Louisiana is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Home Federal Bancorp, Inc. of Louisiana has a beta of 0.41, meaning that its share price is 59% less volatile than the S&P 500. Comparatively, Western Alliance Bancorporation has a beta of 1.42, meaning that its share price is 42% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Home Federal Bancorp, Inc. of Louisiana and Western Alliance Bancorporation, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Home Federal Bancorp, Inc. of Louisiana	0	1	0	0	2.00
Western Alliance Bancorporation	0	5	11	0	2.69

Western Alliance Bancorporation has a consensus price target of $93.12, indicating a potential upside of 25.28%. Given Western Alliance Bancorporation’s stronger consensus rating and higher probable upside, analysts clearly believe Western Alliance Bancorporation is more favorable than Home Federal Bancorp, Inc. of Louisiana.

Summary

Western Alliance Bancorporation beats Home Federal Bancorp, Inc. of Louisiana on 12 of the 17 factors compared between the two stocks.

About Home Federal Bancorp, Inc. of Louisiana

Home Federal Bancorp, Inc. of Louisiana operates as the holding company for Home Federal Bank that provides various financial services to individuals, corporate entities, and other organizations. The company accepts various deposits, such as passbook savings, certificates of deposit, and demand deposit accounts. Its loan products include one-to-four family residential real estate loans; commercial real estate secured loans; multi-family residential loans; commercial business loans; land loans; construction loans; home equity and second mortgage loans; lines of credit; and consumer non-real estate loans, including loans secured by deposit accounts, automobile loans, overdrafts, and other unsecured loans. The company operates through branches in Shreveport, Bossier City, Minden, and Benton, Louisiana. The company was founded in 1924 and is based in Shreveport, Louisiana.

About Western Alliance Bancorporation

Western Alliance Bancorporation operates as the bank holding company for Western Alliance Bank that provides various banking products and related services primarily in Arizona, California, and Nevada. It operates through Commercial and Consumer Related segments. The company offers deposit products, including checking, savings, and money market accounts, as well as fixed-rate and fixed maturity certificates of deposit accounts; demand deposits; and treasury management and residential mortgage products and services. It also provides commercial and industrial loan products, such as working capital lines of credit, loans to technology companies, inventory and accounts receivable lines, mortgage warehouse lines, equipment loans and leases, and other commercial loans; commercial real estate loans, which are secured by multi-family residential properties, professional offices, industrial facilities, retail centers, hotels, and other commercial properties; construction and land development loans for single family and multi-family residential projects, industrial/warehouse properties, office buildings, retail centers, medical office facilities, and residential lot developments; and consumer loans. In addition, the company provides other financial services, such as internet banking, wire transfers, electronic bill payment and presentment, funds transfer and other digital payment offerings, lock box services, courier, and cash management services. Further, the company holds certain investment securities, municipal and non-profit loans, and leases; invests primarily in low-income housing tax credits and small business investment corporations; and holds certain real estate loans and related securities. Western Alliance Bancorporation was founded in 1994 and is headquartered in Phoenix, Arizona.