Analyzing Eagle Financial Services (NASDAQ:EFSI) and Hilltop (NYSE:HTH)

Eagle Financial Services (NASDAQ:EFSI) and Hilltop (NYSE:HTH) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, dividends, valuation, earnings, risk, analyst recommendations and profitability.

Earnings & Valuation

This table compares Eagle Financial Services and Hilltop”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Eagle Financial Services	$105.89 million	1.90	$8.21 million	$3.52	10.54
Hilltop	$1.20 billion	1.81	$165.59 million	$2.64	14.06

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

Dividends

Eagle Financial Services pays an annual dividend of $1.24 per share and has a dividend yield of 3.3%. Hilltop pays an annual dividend of $0.80 per share and has a dividend yield of 2.2%. Eagle Financial Services pays out 35.2% of its earnings in the form of a dividend. Hilltop pays out 30.3% 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. Eagle Financial Services has increased its dividend for 14 consecutive years and Hilltop has increased its dividend for 8 consecutive years. Eagle Financial Services is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

0.3% of Eagle Financial Services shares are owned by institutional investors. Comparatively, 57.1% of Hilltop shares are owned by institutional investors. 7.1% of Eagle Financial Services shares are owned by insiders. Comparatively, 29.9% of Hilltop shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Eagle Financial Services and Hilltop’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Eagle Financial Services	15.81%	10.25%	0.97%
Hilltop	10.13%	7.32%	1.03%

Volatility & Risk

Eagle Financial Services has a beta of 0.22, meaning that its share price is 78% less volatile than the S&P 500. Comparatively, Hilltop has a beta of 0.89, meaning that its share price is 11% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Eagle Financial Services and Hilltop, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Eagle Financial Services	0	4	1	0	2.20
Hilltop	0	2	1	1	2.75

Eagle Financial Services currently has a consensus price target of $42.25, suggesting a potential upside of 13.88%. Hilltop has a consensus price target of $37.50, suggesting a potential upside of 1.00%. Given Eagle Financial Services’ higher probable upside, analysts plainly believe Eagle Financial Services is more favorable than Hilltop.

Summary

Hilltop beats Eagle Financial Services on 10 of the 17 factors compared between the two stocks.

About Eagle Financial Services

Eagle Financial Services, Inc. operates as the bank holding company for Bank of Clarke County that provides various retail and commercial banking products and services in the Shenandoah Valley and Northern Virginia. The company’s deposit products include checking, NOW, money market, and regular savings accounts; and demand and time deposits. Its loan portfolio comprises one-to-four-family residential real estate, commercial real estate, construction and land development, and commercial and industrial loans, as well as secured and unsecured consumer loans, which include personal installment loans, personal lines of credit, automobile loans, and credit card loans. The company also offers personal and retirement plan services; investment services comprising tax-deferred annuities, IRAs and rollovers, mutual funds, retirement plans, college savings plans, life insurance, long term care insurance, fixed income investing, brokerage CDs, and full service or discount brokerage services; non-deposit investment products; and title insurance products. In addition, it provides ATM and debit cards; and telephone, internet, and mobile banking services, as well as other commercial deposit account services, such as ACH origination and remote deposit capture services. The company operates through twelve full-service branches, two loan production offices, one wealth management office, and one drive-through only facility, as well as 13 ATM locations in the Virginia communities of Berryville, Winchester, Boyce, Stephens City, Purcellville, Warrenton, Leesburg, Ashburn, and Fairfax. Eagle Financial Services, Inc. was founded in 1881 and is headquartered in Berryville, Virginia.

About Hilltop

Hilltop Holdings Inc. provides business and consumer banking services. It operates through three segments: Banking, Broker-Dealer, and Mortgage Origination. The Banking segment offers savings, checking, interest-bearing checking, and money market accounts; certificates of deposit; lines and letters of credit, home improvement and equity loans, loans for purchasing and carrying securities, term, agricultural and commercial real estate, equipment loans, and other lending products; and mortgage, commercial and industrial loans, and term and construction finance. It also provides treasury management, asset management, check cards, safe deposit boxes, online banking, bill pay, and overdraft privilege services; and estate planning, management and administration, investment portfolio management, employee benefit accounts, and individual retirement accounts services, as well as automated teller machines. The Broker-Dealer segment offers public finance services that assist public entities in originating, syndicating, and distributing securities of municipalities and political subdivisions; specialized advisory and investment banking services; advice and guidance to arbitrage rebate compliance, portfolio management, and local government investment pool administration; advisory services and products for derivatives and commodities; agricultural insurance; and sells, trades in, and underwrites U.S. government and government agency bonds, corporate bonds, and municipal bonds; mortgage-backed, asset-backed, and commercial mortgage-backed securities and structured products; and provides asset and liability management advisory, clearing, retail, and securities lending services. The Mortgage Origination segment offers fixed and adjustable rate mortgages, jumbo, new construction, Federal Housing Administration, Veterans Affairs, and United States Department of Agriculture loans. Hilltop Holdings Inc. was incorporated in 1998 and is based in Dallas, Texas.