Citigroup (NYSE: C) and Home Bancorp (NASDAQ:HBCP) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, profitability, institutional ownership, valuation, dividends, risk and earnings.

Profitability

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

Net Margins Return on Equity Return on Assets
Citigroup 18.11% 7.32% 0.84%
Home Bancorp 23.05% 9.95% 1.16%

Institutional and Insider Ownership

75.4% of Citigroup shares are held by institutional investors. Comparatively, 43.0% of Home Bancorp shares are held by institutional investors. 0.1% of Citigroup shares are held by insiders. Comparatively, 15.5% of Home Bancorp shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Citigroup and Home Bancorp’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Citigroup $64.31 billion 3.14 $13.65 billion $5.01 14.78
Home Bancorp $70.79 million 4.39 $18.65 million $2.52 16.65

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

Analyst Recommendations

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Citigroup 2 8 15 0 2.52
Home Bancorp 0 1 0 0 2.00

Citigroup currently has a consensus price target of $71.55, indicating a potential downside of 3.39%. Given Citigroup’s stronger consensus rating and higher probable upside, research analysts clearly believe Citigroup is more favorable than Home Bancorp.

Dividends

Citigroup pays an annual dividend of $1.28 per share and has a dividend yield of 1.7%. Home Bancorp pays an annual dividend of $0.56 per share and has a dividend yield of 1.3%. Citigroup pays out 25.5% of its earnings in the form of a dividend. Home Bancorp pays out 22.2% 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 2 consecutive years.

Risk & Volatility

Citigroup has a beta of 1.45, indicating that its share price is 45% more volatile than the S&P 500. Comparatively, Home Bancorp has a beta of 0.11, indicating that its share price is 89% less volatile than the S&P 500.

Summary

Citigroup beats Home Bancorp on 9 of the 17 factors compared between the two stocks.

About Citigroup

Citigroup Inc. (Citi) is a financial services holding company. The Company’s whose businesses provide consumers, corporations, governments and institutions with a range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, trade and securities services and wealth management. The Company operates through two segments: Citicorp and Citi Holdings. Citicorp is the Company’s global bank for consumers and businesses and represents its core franchises. Citicorp is focused on providing products and services to customers and leveraging the Company’s global network, including various economies. As of December 31, 2016, Citicorp was present in 97 countries and jurisdictions, and offered services in over 160 countries and jurisdictions. Global Consumer Banking (GCB) provides traditional banking services to retail customers through retail banking, including Citi-branded cards and Citi retail services.

About Home Bancorp

Home Bancorp, Inc. is a bank holding company for Home Bank, N.A. (the Bank). The Bank conducts business through banking offices in the Greater Lafayette, Baton Rouge, Greater New Orleans and Northshore (of Lake Pontchartrain) regions of south Louisiana and the Natchez and Vicksburg regions of west Mississippi. The Bank is engaged in attracting deposits from the general public and using those funds to invest in loans and securities. The Bank originates loans, including one- to four-family first mortgage loans, home equity loans and lines, construction and land loans, multi-family residential loans and consumer loans. The Bank’s lending activities include loans secured by commercial real estate loans, and commercial and industrial loans. In addition to commercial real estate and commercial and industrial loans, the Bank holds a portfolio of construction and land loans.

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