Contrasting Home BancShares (NYSE:HOMB) & Columbia Financial (NASDAQ:CLBK)

Home BancShares (NYSE:HOMB) and Columbia Financial (NASDAQ:CLBK) are both mid-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, dividends, profitability, analyst recommendations, earnings and valuation.

Dividends

Home BancShares pays an annual dividend of $0.92 per share and has a dividend yield of 3.1%. Columbia Financial pays an annual dividend of $0.20 per share and has a dividend yield of 1.8%. Home BancShares pays out 37.7% of its earnings in the form of a dividend. Columbia Financial pays out 69.0% 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. Home BancShares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Home BancShares	$1.48 billion	4.05	$475.44 million	$2.44	12.25
Columbia Financial	$508.02 million	5.89	$51.77 million	$0.29	38.31

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

Profitability

This table compares Home BancShares and Columbia Financial’s 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%
Columbia Financial	8.54%	7.35%	0.76%

Risk & Volatility

Home BancShares has a beta of 0.73, suggesting that its share price is 27% less volatile than the S&P 500. Comparatively, Columbia Financial has a beta of 0.27, suggesting that its share price is 73% less volatile than the S&P 500.

Institutional and Insider Ownership

67.3% of Home BancShares shares are owned by institutional investors. Comparatively, 12.7% of Columbia Financial shares are owned by institutional investors. 6.4% of Home BancShares shares are owned by insiders. Comparatively, 3.5% of Columbia Financial shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings for Home BancShares and Columbia Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Home BancShares	0	5	5	0	2.50
Columbia Financial	0	1	3	0	2.75

Home BancShares currently has a consensus price target of $32.57, indicating a potential upside of 8.95%. Columbia Financial has a consensus price target of $15.10, indicating a potential upside of 35.91%. Given Columbia Financial’s stronger consensus rating and higher possible upside, analysts plainly believe Columbia Financial is more favorable than Home BancShares.

Summary

Home BancShares beats Columbia Financial on 13 of the 17 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 Columbia Financial

Columbia Financial, Inc., a bank holding company, provides various financial services to businesses and consumers in the United States. Its deposit products include checking, interest-earning checking products and municipal, savings and club deposits, and money market accounts, as well as certificates of deposit. The company also provides various loans, including multifamily and commercial real estate loans, commercial business loans, one-to-four family residential loans, construction loans, home equity loans and advances, and other consumer loans, such as automobiles and personal loans, as well as unsecured and overdraft lines of credit. In addition, it offers title insurance products; wealth management services; and cash management services comprising remote deposit, lockbox service, sweep accounts, and escrow services. The company operates full-service banking offices in New Jersey; and branch offices in Freehold, New Jersey. Columbia Financial, Inc. was founded in 1926 and is based in Fair Lawn, New Jersey. Columbia Financial, Inc. is a subsidiary of Columbia Bank MHC.