Analyzing Home Bancshares (NASDAQ:HOMB) & M&F Bancorp (NASDAQ:MFBP)

Home Bancshares (NASDAQ:HOMB) and M&F Bancorp (OTCMKTS:MFBP) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, risk, analyst recommendations, dividends, earnings, profitability and institutional ownership.

Analyst Ratings

This is a summary of current ratings and target prices for Home Bancshares and M&F Bancorp, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Home Bancshares 0 1 3 0 2.75
M&F Bancorp 0 0 0 0 N/A

Home Bancshares currently has a consensus price target of $21.50, indicating a potential upside of 13.82%. Given Home Bancshares’ higher probable upside, analysts plainly believe Home Bancshares is more favorable than M&F Bancorp.

Dividends

Home Bancshares pays an annual dividend of $0.52 per share and has a dividend yield of 2.8%. M&F Bancorp does not pay a dividend. Home Bancshares pays out 29.7% of its earnings in the form of a dividend.

Insider and Institutional Ownership

65.9% of Home Bancshares shares are owned by institutional investors. 8.7% of Home Bancshares shares are owned by insiders. Comparatively, 2.9% of M&F Bancorp shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Home Bancshares and M&F Bancorp’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Home Bancshares $788.20 million 4.01 $300.40 million $1.75 10.79
M&F Bancorp N/A N/A N/A N/A N/A

Home Bancshares has higher revenue and earnings than M&F Bancorp.

Volatility & Risk

Home Bancshares has a beta of 1.2, suggesting that its stock price is 20% more volatile than the S&P 500. Comparatively, M&F Bancorp has a beta of 0.47, suggesting that its stock price is 53% less volatile than the S&P 500.

Profitability

This table compares Home Bancshares and M&F Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Home Bancshares 35.22% 12.22% 1.93%
M&F Bancorp N/A N/A N/A

Summary

Home Bancshares beats M&F Bancorp on 10 of the 11 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, NOW, demand, 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 also provides Internet banking, mobile banking, 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. As of December 31, 2018, it operated through 159 branch locations, including 77 branches in Arkansas, 76 branches in Florida, 5 branches in Alabama, and 1 branch in New York City. Home Bancshares, Inc. (Conway, AR) was founded in 1998 and is headquartered in Conway, Arkansas.

About M&F Bancorp

M&F Bancorp, Inc. operates as a holding company for Mechanics and Farmers Bank. The company operates through its wholly-owned subsidiary, Mechanics and Farmers Bank. It offers banking services which includes checking accounts; savings accounts; Negotiable Order of Withdrawal accounts; money market accounts; certificates of deposit; individual retirement accounts; loans for real estate, construction, businesses, personal use, home improvement and automobiles; equity lines of credit; credit lines; consumer loans; credit cards; safe deposit boxes; bank money orders; internet banking; electronic funds transfer services including wire transfers; traveler’s checks; and notary services. M&F Bancorp was founded in 1999 and is headquartered in Durham, NC.

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