Head-To-Head Analysis: Home Bancorp (NASDAQ:HBCP) versus Red River Bancshares (NASDAQ:RRBI)
by Danessa Lincoln · The Markets DailyHome Bancorp (NASDAQ:HBCP – Get Free Report) and Red River Bancshares (NASDAQ:RRBI – Get Free Report) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, analyst recommendations, earnings, valuation, profitability, dividends and institutional ownership.
Analyst Recommendations
This is a breakdown of recent recommendations for Home Bancorp and Red River Bancshares, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Home Bancorp | 0 | 3 | 1 | 1 | 2.60 |
| Red River Bancshares | 0 | 3 | 1 | 0 | 2.25 |
Home Bancorp currently has a consensus price target of $69.50, suggesting a potential upside of 1.36%. Red River Bancshares has a consensus price target of $106.00, suggesting a potential upside of 3.78%. Given Red River Bancshares’ higher possible upside, analysts clearly believe Red River Bancshares is more favorable than Home Bancorp.
Valuation and Earnings
This table compares Home Bancorp and Red River Bancshares”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 | 2.57 | $46.06 million | $5.98 | 11.47 |
| Red River Bancshares | $169.85 million | 3.96 | $42.76 million | $6.95 | 14.70 |
Home Bancorp has higher revenue and earnings than Red River Bancshares. Home Bancorp is trading at a lower price-to-earnings ratio than Red River Bancshares, 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 1.9%. Red River Bancshares pays an annual dividend of $1.00 per share and has a dividend yield of 1.0%. Home Bancorp pays out 21.4% of its earnings in the form of a dividend. Red River Bancshares pays out 14.4% 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 increased its dividend for 10 consecutive years and Red River Bancshares has increased its dividend for 3 consecutive years. Home Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional and Insider Ownership
49.4% of Home Bancorp shares are held by institutional investors. Comparatively, 27.6% of Red River Bancshares shares are held by institutional investors. 6.2% of Home Bancorp shares are held by company insiders. Comparatively, 16.6% of Red River Bancshares shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Volatility and Risk
Home Bancorp has a beta of 0.49, indicating that its share price is 51% less volatile than the S&P 500. Comparatively, Red River Bancshares has a beta of 0.41, indicating that its share price is 59% less volatile than the S&P 500.
Profitability
This table compares Home Bancorp and Red River Bancshares’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Home Bancorp | 22.23% | 10.65% | 1.32% |
| Red River Bancshares | 26.25% | 12.47% | 1.39% |
Summary
Red River Bancshares beats Home Bancorp on 9 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 Red River Bancshares
Red River Bancshares, Inc. operates as a bank holding company for Red River Bank that provides banking products and services to commercial and retail customers in Louisiana. The company provides various deposit products, including checking, saving, money market accounts, and time deposits. It offers commercial real estate loans; one-to-four family mortgage loans and home equity lines of credit; construction and development loans; commercial and industrial loans; small business administration paycheck protection program loans; tax-exempt loans; consumer loans to individuals for personal, family, and household purposes, including secured and unsecured installment and term loans; home mortgage loans; and lines of credit and standby letters of credit. In addition, the company provides treasury management, private banking, and brokerage; investment advisory, financial planning, and a suite of retirement plans; debit and credit cards, direct deposits, cashier's checks, and wire transfer services; online banking services, including access to account balances, online transfers, online bill payment, and electronic delivery of customer statements; and banking services in person, through ATMs, drive-through facilities, night deposits, telephone, mail, mobile banking, and remote deposits. Red River Bancshares, Inc. was incorporated in 1998 and is headquartered in Alexandria, Louisiana.