Comparing Home BancShares (NYSE:HOMB) & First Business Financial Services (NASDAQ:FBIZ)

Home BancShares (NYSE:HOMB) and First Business Financial Services (NASDAQ:FBIZ) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, valuation, risk, profitability, analyst recommendations, earnings and institutional ownership.

Risk and Volatility

Home BancShares has a beta of 0.72, meaning that its share price is 28% less volatile than the S&P 500. Comparatively, First Business Financial Services has a beta of 0.67, meaning that its share price is 33% less volatile than the S&P 500.

Dividends

Home BancShares pays an annual dividend of $0.92 per share and has a dividend yield of 3.1%. First Business Financial Services pays an annual dividend of $1.36 per share and has a dividend yield of 1.9%. Home BancShares pays out 37.7% of its earnings in the form of a dividend. First Business Financial Services pays out 20.7% 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 increased its dividend for 15 consecutive years and First Business Financial Services has increased its dividend for 13 consecutive years. Home BancShares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Home BancShares and First Business Financial Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Home BancShares	32.36%	11.14%	2.08%
First Business Financial Services	19.28%	14.92%	1.29%

Insider and Institutional Ownership

67.3% of Home BancShares shares are owned by institutional investors. Comparatively, 60.1% of First Business Financial Services shares are owned by institutional investors. 6.4% of Home BancShares shares are owned by company insiders. Comparatively, 5.0% of First Business Financial Services shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Home BancShares and First Business Financial Services”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Home BancShares	$1.12 billion	5.25	$475.44 million	$2.44	12.03
First Business Financial Services	$279.25 million	2.13	$50.32 million	$6.56	10.81

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

Analyst Recommendations

This is a summary of recent recommendations for Home BancShares and First Business Financial Services, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Home BancShares	0	5	5	0	2.50
First Business Financial Services	0	0	4	1	3.20

Home BancShares presently has a consensus price target of $32.57, suggesting a potential upside of 10.99%. First Business Financial Services has a consensus price target of $78.25, suggesting a potential upside of 10.37%. Given Home BancShares’ higher probable upside, equities analysts plainly believe Home BancShares is more favorable than First Business Financial Services.

Summary

Home BancShares beats First Business Financial Services on 13 of the 18 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 First Business Financial Services

First Business Financial Services, Inc. operates as the bank holding company for First Business Bank that provides commercial banking products and services for small and medium-sized businesses, business owners, executives, professionals, and high net worth individuals in Wisconsin, Kansas, and Missouri. The company offers real estate lending, commercial and industrial lending, asset-based lending, accounts receivable financing, equipment financing loans and leases, floorplan financing, vendor financing, small business administration lending and servicing, treasury management solutions, and company retirement services. It also provides private wealth management for individuals, including creating and executing asset allocation strategies, trust and estate administration, financial planning, investment management, and access to brokerage and custody-only services. In addition, the company offers bank consulting consisting of investment portfolio administrative and asset liability management services, and commercial deposit accounts. The company was founded in 1909 and is headquartered in Madison, Wisconsin.