Financial Review: CPB (NYSE:CPF) versus Home BancShares (NYSE:HOMB)

Home BancShares (NYSE:HOMB) and CPB (NYSE:CPF) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, earnings, analyst recommendations, institutional ownership, valuation, risk and profitability.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Home BancShares	32.10%	11.12%	2.07%
CPB	22.52%	14.20%	1.13%

Analyst Ratings

This is a breakdown of recent ratings and target prices for Home BancShares and CPB, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Home BancShares	0	4	5	0	2.56
CPB	0	3	3	0	2.50

Home BancShares currently has a consensus price target of $33.00, indicating a potential upside of 16.71%. CPB has a consensus price target of $39.00, indicating a potential upside of 9.38%. Given Home BancShares’ stronger consensus rating and higher possible upside, analysts clearly believe Home BancShares is more favorable than CPB.

Dividends

Home BancShares pays an annual dividend of $0.92 per share and has a dividend yield of 3.3%. CPB pays an annual dividend of $1.20 per share and has a dividend yield of 3.4%. Home BancShares pays out 38.0% of its earnings in the form of a dividend. CPB pays out 38.5% 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 raised its dividend for 15 consecutive years and CPB has raised its dividend for 1 consecutive years.

Volatility and Risk

Home BancShares has a beta of 0.72, suggesting that its share price is 28% less volatile than the S&P 500. Comparatively, CPB has a beta of 0.87, suggesting that its share price is 13% less volatile than the S&P 500.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Home BancShares	$1.48 billion	3.83	$475.44 million	$2.42	11.68
CPB	$365.98 million	2.51	$77.48 million	$3.12	11.43

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

Insider and Institutional Ownership

67.3% of Home BancShares shares are held by institutional investors. Comparatively, 88.4% of CPB shares are held by institutional investors. 6.4% of Home BancShares shares are held by company insiders. Comparatively, 1.7% of CPB shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Home BancShares beats CPB on 12 of the 17 factors compared between the two stocks.

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, 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 CPB

Central Pacific Financial Corp. operates as the bank holding company for Central Pacific Bank that provides a range of commercial banking products and services to businesses, professionals, and individuals in the United States. It offers various deposit products and services, including checking, savings and time deposits, cash management and digital banking, trust, and retail brokerage services, as well as money market accounts and certificates of deposit. The company also provides various lending activities, such as commercial, commercial and residential mortgage, home equity, and consumer loans; and other products and services comprising debit cards, internet and mobile banking, cash management services, full-service ATMs, safe deposit boxes, international banking services, night depository facilities, foreign exchange, and wire transfers. In addition, it offers wealth management products and services that include non-deposit investment products, annuities, insurance, investment management, asset custody and general consultation, and planning services. The company was founded in 1954 and is headquartered in Honolulu, Hawaii.