Analyzing Home Bancorp (NASDAQ:HBCP) and Guaranty Bancshares (NASDAQ:GNTY)

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

Insider and Institutional Ownership

49.4% of Home Bancorp shares are held by institutional investors. Comparatively, 39.4% of Guaranty Bancshares shares are held by institutional investors. 7.4% of Home Bancorp shares are held by insiders. Comparatively, 26.4% of Guaranty Bancshares shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Home Bancorp and Guaranty Bancshares’ top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Home Bancorp	$132.87 million	2.29	$40.24 million	$4.74	7.91
Guaranty Bancshares	$179.01 million	1.92	$30.04 million	$2.44	12.25

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

Dividends

Home Bancorp pays an annual dividend of $1.00 per share and has a dividend yield of 2.7%. Guaranty Bancshares pays an annual dividend of $0.96 per share and has a dividend yield of 3.2%. Home Bancorp pays out 21.1% of its earnings in the form of a dividend. Guaranty Bancshares pays out 39.3% 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 8 consecutive years and Guaranty Bancshares has raised its dividend for 7 consecutive years.

Volatility & Risk

Home Bancorp has a beta of 0.68, suggesting that its stock price is 32% less volatile than the S&P 500. Comparatively, Guaranty Bancshares has a beta of 0.55, suggesting that its stock price is 45% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations for Home Bancorp and Guaranty Bancshares, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Home Bancorp	0	1	1	0	2.50
Guaranty Bancshares	0	2	1	0	2.33

Home Bancorp presently has a consensus target price of $41.50, indicating a potential upside of 10.67%. Guaranty Bancshares has a consensus target price of $33.33, indicating a potential upside of 11.52%. Given Guaranty Bancshares’ higher possible upside, analysts clearly believe Guaranty Bancshares is more favorable than Home Bancorp.

Profitability

This table compares Home Bancorp and Guaranty Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Home Bancorp	20.66%	10.65%	1.15%
Guaranty Bancshares	15.56%	8.69%	0.82%

Summary

Home Bancorp beats Guaranty Bancshares on 11 of the 16 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 Guaranty Bancshares

Guaranty Bancshares, Inc. operates as the bank holding company for Guaranty Bank & Trust, N.A. that provides a range of commercial and consumer banking products and services for small- and medium-sized businesses, professionals, and individuals. The company offers checking and savings, money market, and business accounts, as well as certificates of deposit; and commercial and industrial, construction and development, 1-4 family residential, commercial real estate, farmland, agricultural, multi-family residential, and consumer loans. It also provides trustee, custodial and escrow, investment management, retirement plan, ATM, night depository, direct deposit, and cashier's check services, as well as online and mobile banking services; debit cards; letters of credit; and treasury management services, including wire transfer, positive pay, remote deposit capture, and automated clearinghouse services. Guaranty Bancshares, Inc. was founded in 1913 and is headquartered in Addison, Texas.