Bank Of The Ozarks (NASDAQ: HFBC) and HopFed Bancorp (NASDAQ:HFBC) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, valuation, institutional ownership, risk, profitability, dividends and analyst recommendations.

Insider and Institutional Ownership

90.9% of Bank Of The Ozarks shares are held by institutional investors. Comparatively, 47.6% of HopFed Bancorp shares are held by institutional investors. 6.7% of Bank Of The Ozarks shares are held by insiders. Comparatively, 4.1% of HopFed Bancorp shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Bank Of The Ozarks and HopFed Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Bank Of The Ozarks 41.20% 12.05% 1.95%
HopFed Bancorp 10.30% 6.18% 0.59%

Dividends

Bank Of The Ozarks pays an annual dividend of $0.80 per share and has a dividend yield of 1.9%. HopFed Bancorp pays an annual dividend of $0.28 per share and has a dividend yield of 1.7%. Bank Of The Ozarks pays out 27.0% of its earnings in the form of a dividend. HopFed Bancorp pays out 36.8% 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. Bank Of The Ozarks is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares Bank Of The Ozarks and HopFed Bancorp’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Bank Of The Ozarks $1.06 billion 5.00 $421.89 million $2.96 13.93
HopFed Bancorp $41.78 million 2.67 $3.30 million $0.76 22.04

Bank Of The Ozarks has higher revenue and earnings than HopFed Bancorp. Bank Of The Ozarks is trading at a lower price-to-earnings ratio than HopFed Bancorp, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Bank Of The Ozarks has a beta of 1.35, indicating that its stock price is 35% more volatile than the S&P 500. Comparatively, HopFed Bancorp has a beta of 0.18, indicating that its stock price is 82% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations for Bank Of The Ozarks and HopFed Bancorp, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bank Of The Ozarks 1 3 6 1 2.64
HopFed Bancorp 0 0 0 0 N/A

Bank Of The Ozarks currently has a consensus target price of $54.90, indicating a potential upside of 33.12%. Given Bank Of The Ozarks’ higher possible upside, equities research analysts plainly believe Bank Of The Ozarks is more favorable than HopFed Bancorp.

Summary

Bank Of The Ozarks beats HopFed Bancorp on 15 of the 16 factors compared between the two stocks.

Bank Of The Ozarks Company Profile

Bank of the Ozarks provides a range of retail and commercial banking services to businesses, individuals, and non-profit and governmental entities. The company accepts non-interest bearing checking, interest bearing transaction, business sweep, savings, money market, individual retirement, and other accounts, as well as time deposits. Its loan products include real estate loans, such as loans secured by residential 1-4 family, non-farm/non-residential, agricultural, construction/land development, multifamily residential properties, and other land loans; small business and consumer loans; indirect consumer marine and RV loans; and government guaranteed loans comprising SBA and FSA guaranteed loans. The company's loan products also consist of commercial and industrial loans, and leases; and agricultural loans, including loans to businesses or individuals engages in the production of timber, poultry, livestock, or crops. In addition, it is involved in the provision of mortgage lending; treasury management services, such as wholesale lock box services; remote deposit capture services; and trust and wealth management services comprising financial planning, money management, custodial, and corporate trust services, as well as real estate development and corporate aircraft businesses. Further, the company provides real estate appraisals; ATMs; telephone banking; online and mobile banking services consisting of electronic bill pay and mobile deposits; debit, gift, and credit cards; safe deposit boxes; investment securities services; and other products and services, as well as processes merchant debit and credit card transactions. As of December 31, 2017, it operated through 253 offices in Arkansas, Georgia, Florida, North Carolina, Texas, Alabama, South Carolina, California, New York, and Mississippi. Bank of the Ozarks was founded in 1981 and is headquartered in Little Rock, Arkansas.

HopFed Bancorp Company Profile

HopFed Bancorp, Inc. operates as the bank holding company for Heritage Bank USA, Inc. that provides various banking products and services. The company accepts various deposit products, including money market accounts, passbook savings accounts, individual retirement accounts, certificates of deposit, and time deposits, as well as non-interest bearing, savings, and interest bearing checking accounts. It also provides loans, such as one-to-four family first mortgages, home equity lines of credit, junior liens, multi-family loans, construction and land loans, non-residential real estate loans, and farm loans, as well as secured and unsecured consumer and commercial loans. In addition, the company owns a low income senior citizen housing facility that offers apartments for rent in Bowling Green, Kentucky. Further, it invests in the United States government agency securities, municipal and corporate bonds, collateralized mortgages obligations, and mortgage-backed securities. As of March 21, 2018, the company operated 18 offices in western Kentucky and middle Tennessee; Heritage Bank Wealth Management of Murray, Kentucky, Hopkinsville, Kentucky, Kingston Springs, Tennessee, and Clarksville, Tennessee; and Heritage Mortgage Services of Clarksville, Tennessee, as well as loan production offices in Nashville, Tennessee, and Brentwood, Tennessee. HopFed Bancorp, Inc. was founded in 1879 and is headquartered in Hopkinsville, Kentucky.

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