Contrasting Home Bancorp (NASDAQ:HBCP) and Auburn National Bancorporation (NASDAQ:AUBN)

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

Institutional and Insider Ownership

49.4% of Home Bancorp shares are held by institutional investors. Comparatively, 39.5% of Auburn National Bancorporation shares are held by institutional investors. 6.2% of Home Bancorp shares are held by insiders. Comparatively, 18.7% of Auburn National Bancorporation shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility and Risk

Home Bancorp has a beta of 0.52, suggesting that its stock price is 48% less volatile than the S&P 500. Comparatively, Auburn National Bancorporation has a beta of 0.43, suggesting that its stock price is 57% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Home Bancorp and Auburn National Bancorporation, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Home Bancorp	0	3	2	0	2.40
Auburn National Bancorporation	0	1	0	0	2.00

Home Bancorp presently has a consensus price target of $65.17, suggesting a potential upside of 6.19%. Given Home Bancorp’s stronger consensus rating and higher possible upside, research analysts clearly believe Home Bancorp is more favorable than Auburn National Bancorporation.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Home Bancorp	$209.23 million	2.30	$46.06 million	$5.67	10.82
Auburn National Bancorporation	$43.89 million	2.02	$7.26 million	$2.49	10.21

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

Dividends

Home Bancorp pays an annual dividend of $1.28 per share and has a dividend yield of 2.1%. Auburn National Bancorporation pays an annual dividend of $1.08 per share and has a dividend yield of 4.2%. Home Bancorp pays out 22.6% of its earnings in the form of a dividend. Auburn National Bancorporation pays out 43.4% 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 Bancorp has raised its dividend for 10 consecutive years.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Home Bancorp	21.05%	10.01%	1.25%
Auburn National Bancorporation	18.60%	9.34%	0.83%

Summary

Home Bancorp beats Auburn National Bancorporation on 15 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 Auburn National Bancorporation

Auburn National Bancorporation, Inc. operates as the bank holding company for AuburnBank that provides various banking products and services in East Alabama. The company offers checking, savings, and transaction deposit accounts, as well as certificates of deposit. It also provides commercial, financial, agricultural, real estate construction, and consumer loan products; and other financial services. In addition, the company offers automated teller services; debit cards; online banking, bill payment, and other electronic banking services; and safe deposit boxes. Auburn National Bancorporation, Inc. was founded in 1907 and is headquartered in Auburn, Alabama.