Comparing Home Bancorp (NASDAQ:HBCP) and National Bankshares (NASDAQ:NKSH)

Home Bancorp (NASDAQ:HBCP) and National Bankshares (NASDAQ:NKSH) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, dividends, profitability, valuation and risk.

Risk & Volatility

Home Bancorp has a beta of 0.62, suggesting that its share price is 38% less volatile than the S&P 500. Comparatively, National Bankshares has a beta of 0.75, suggesting that its share price is 25% less volatile than the S&P 500.

Valuation and Earnings

This table compares Home Bancorp and National Bankshares”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Home Bancorp	$199.39 million	2.14	$36.43 million	$5.21	10.46
National Bankshares	$79.08 million	2.34	$7.62 million	$1.77	16.39

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

Profitability

This table compares Home Bancorp and National Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Home Bancorp	20.09%	10.34%	1.19%
National Bankshares	13.58%	7.69%	0.70%

Dividends

Home Bancorp pays an annual dividend of $1.16 per share and has a dividend yield of 2.1%. National Bankshares pays an annual dividend of $1.46 per share and has a dividend yield of 5.0%. Home Bancorp pays out 22.3% of its earnings in the form of a dividend. National Bankshares pays out 82.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Home Bancorp has raised its dividend for 10 consecutive years.

Institutional and Insider Ownership

49.4% of Home Bancorp shares are held by institutional investors. Comparatively, 29.7% of National Bankshares shares are held by institutional investors. 7.9% of Home Bancorp shares are held by insiders. Comparatively, 3.2% of National Bankshares shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and price targets for Home Bancorp and National Bankshares, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Home Bancorp	0	2	3	0	2.60
National Bankshares	0	1	1	0	2.50

Home Bancorp currently has a consensus price target of $59.50, indicating a potential upside of 9.17%. National Bankshares has a consensus price target of $38.00, indicating a potential upside of 30.99%. Given National Bankshares’ higher possible upside, analysts clearly believe National Bankshares is more favorable than Home Bancorp.

Summary

Home Bancorp beats National Bankshares on 12 of the 17 factors compared between the two stocks.

About Home Bancorp

Home Bancorp, Inc. operates as the bank holding company for Home Bank, National Association that provides various banking products and services in Louisiana, Mississippi, and Texas. It offers deposit products, including interest-bearing and noninterest-bearing checking, money market, savings, NOW, and certificates of deposit accounts. The company also provides various loan products comprising one-to four-family first mortgage loans, home equity loans and lines, commercial real estate loans, construction and land loans, multi-family residential loans, commercial and industrial loans, and consumer loans. In addition, it invests in securities; and offers credit cards and online banking services. Home Bancorp, Inc. was founded in 1908 and is headquartered in Lafayette, Louisiana.

About National Bankshares

National Bankshares, Inc. operates as the bank holding company for the National Bank of Blacksburg that provides retail and commercial banking products and services to individuals, businesses, non-profits, and local governments. The company accepts interest-bearing and non-interest-bearing demand deposit accounts, money market deposit accounts, savings accounts, certificates of deposit, health savings accounts, and individual retirement accounts. Its loan products include commercial and agricultural, commercial real estate, residential real estate, home equity, and various consumer loan products, as well as loans for the construction of commercial and residential properties. The company also provides business and consumer debit and credit cards; letters of credit, night depository services, safe deposit boxes, utility payment services, and automatic funds transfer; wealth management, trust, and estate services; non-deposit investment and insurance products; and telephone, mobile, and Internet banking services. The company was founded in 1891 and is headquartered in Blacksburg, Virginia.