Truist Financial (NYSE:TFC) versus HBT Financial (NASDAQ:HBT) Critical Analysis

Truist Financial (NYSE:TFC) and HBT Financial (NASDAQ:HBT) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their profitability, institutional ownership, valuation, risk, analyst recommendations, earnings and dividends.

Insider & Institutional Ownership

71.3% of Truist Financial shares are owned by institutional investors. Comparatively, 78.5% of HBT Financial shares are owned by institutional investors. 0.2% of Truist Financial shares are owned by insiders. Comparatively, 51.9% of HBT Financial shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Truist Financial and HBT Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Truist Financial	18.01%	10.37%	1.10%
HBT Financial	23.44%	13.46%	1.55%

Volatility & Risk

Truist Financial has a beta of 0.92, meaning that its share price is 8% less volatile than the S&P 500. Comparatively, HBT Financial has a beta of 0.49, meaning that its share price is 51% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations for Truist Financial and HBT Financial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Truist Financial	2	9	7	0	2.28
HBT Financial	0	2	3	2	3.00

Truist Financial presently has a consensus target price of $53.87, suggesting a potential upside of 11.08%. HBT Financial has a consensus target price of $37.40, suggesting a potential upside of 3.20%. Given Truist Financial’s higher possible upside, equities research analysts plainly believe Truist Financial is more favorable than HBT Financial.

Dividends

Truist Financial pays an annual dividend of $2.08 per share and has a dividend yield of 4.3%. HBT Financial pays an annual dividend of $1.00 per share and has a dividend yield of 2.8%. Truist Financial pays out 53.6% of its earnings in the form of a dividend. HBT Financial pays out 42.9% 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. HBT Financial has raised its dividend for 5 consecutive years.

Earnings and Valuation

This table compares Truist Financial and HBT Financial”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Truist Financial	$30.44 billion	1.95	$5.31 billion	$3.88	12.50
HBT Financial	$293.97 million	4.48	$77.01 million	$2.33	15.55

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

Summary

HBT Financial beats Truist Financial on 11 of the 18 factors compared between the two stocks.

About Truist Financial

Truist Financial Corporation, a financial services company, provides banking and trust services in the Southeastern and Mid-Atlantic United States. The company operates through three segments: Consumer Banking and Wealth, Corporate and Commercial Banking, and Insurance Holdings.Its deposit products include noninterest-bearing checking, interest-bearing checking, savings, and money market deposit accounts, as well as certificates of deposit and individual retirement accounts. The company also provides funding; asset management; automobile lending; credit card lending; consumer finance; home equity and mortgage lending; other direct retail lending; insurance; investment brokerage; mobile/online banking; payment solutions; point-of-sale lending; retail and small business deposit products; small business lending; and wealth management/private banking services. In addition, it offers asset based lending, investment banking and capital market, institutional trust, insurance premium finance, derivatives, commercial lending, international banking, leasing, merchant, commercial deposit and treasury, floor plan, mortgage warehouse lending, real estate lending, and supply chain financing services. Further, the company provides insurance brokerage, retail and wholesale brokerage, securities underwriting and market making, loan syndication, and investment management and advisory services. The company was formerly known as BB&T Corporation and changed its name to Truist Financial Corporation in December 2019. Truist Financial Corporation was founded in 1872 and is headquartered in Charlotte, North Carolina.

About HBT Financial

HBT Financial, Inc. operates as the bank holding company for Heartland Bank and Trust Company that provides business, commercial, and retail banking products and services to individuals, businesses, and municipal entities in Central and Northeastern Illinois, and Eastern Iowa. The company's deposits accounts consist of noninterest-bearing demand deposits, interest-bearing transaction accounts, money market accounts, savings accounts, certificates of deposits, health savings accounts, and individual retirement accounts. Its loan offering comprises owner and non-owner occupied commercial real estate; construction and land development and multi-family; commercial and industrial; agricultural and farmland; and one-to-four family residential loans, as well as municipal, consumer, and other loans. The company also offers wealth management services, including financial planning to consumers, trusts, and estates; trustee and custodial; investment management; corporate retirement plan consulting and administration; and retail brokerage services. In addition, it provides farmland management, and farmland sales and services; commercial checking accounts; and treasury management services, as well as originates and sells residential mortgage loans. Further, the company offers digital banking services, such as online and mobile banking, and digital payment services, as well as personal financial management tools. The company was formerly known as Heartland Bancorp, Inc. and changed its name to HBT Financial, Inc. in September 2019. HBT Financial, Inc. was founded in 1920 and is headquartered in Bloomington, Illinois.