MetroCity Bankshares (NASDAQ:MCBS) vs. Home Bancorp (NASDAQ:HBCP) Critical Contrast

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

Valuation & Earnings

This table compares MetroCity Bankshares and Home Bancorp”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MetroCity Bankshares	$246.01 million	3.66	$68.53 million	$2.77	11.33
Home Bancorp	$151.18 million	3.28	$46.06 million	$5.95	10.63

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

Profitability

This table compares MetroCity Bankshares and Home Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MetroCity Bankshares	28.16%	15.09%	1.79%
Home Bancorp	22.18%	10.86%	1.32%

Institutional & Insider Ownership

25.3% of MetroCity Bankshares shares are held by institutional investors. Comparatively, 49.4% of Home Bancorp shares are held by institutional investors. 27.5% of MetroCity Bankshares shares are held by insiders. Comparatively, 6.2% of Home Bancorp shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

MetroCity Bankshares has a beta of 0.72, suggesting that its share price is 28% less volatile than the S&P 500. Comparatively, Home Bancorp has a beta of 0.5, suggesting that its share price is 50% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and price targets for MetroCity Bankshares and Home Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MetroCity Bankshares	0	1	1	0	2.50
Home Bancorp	0	3	1	1	2.60

MetroCity Bankshares currently has a consensus target price of $33.00, suggesting a potential upside of 5.16%. Home Bancorp has a consensus target price of $65.50, suggesting a potential upside of 3.52%. Given MetroCity Bankshares’ higher probable upside, equities research analysts plainly believe MetroCity Bankshares is more favorable than Home Bancorp.

Dividends

MetroCity Bankshares pays an annual dividend of $1.16 per share and has a dividend yield of 3.7%. Home Bancorp pays an annual dividend of $1.24 per share and has a dividend yield of 2.0%. MetroCity Bankshares pays out 41.9% of its earnings in the form of a dividend. Home Bancorp pays out 20.8% 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. Home Bancorp has increased its dividend for 10 consecutive years.

Summary

MetroCity Bankshares beats Home Bancorp on 11 of the 17 factors compared between the two stocks.

About MetroCity Bankshares

MetroCity Bankshares, Inc. operates as the bank holding company for Metro City Bank that engages in the provision of banking products and services in the United States. It offers customary banking services, such as consumer and commercial checking accounts, savings, and money market accounts, as well as certificates of deposit. The company also provides commercial and consumer loans, including single family residential loans; construction and development, and owner and non-owner occupied commercial real estate loans; letters of credit; and commercial and industrial loans, residential mortgage loans, and SBA loans. In addition, it offers online banking services, which include access to account balances, online transfers, online bill payment, and electronic delivery of customer statements; mobile banking solutions, such as remote check deposit with mobile bill pay; and automated teller machines and telephone banking services. Further, it provides debit cards for checking customers, direct deposits, and cashier's checks; treasury management services, including wire transfer, automated clearing house, and stop payments services; and cash management deposit products, such as remote deposit capture, positive pay, zero balance accounts, and sweep accounts. The company was founded in 2006 and is headquartered in Atlanta, Georgia.

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.