Critical Review: Home Bancshares, Inc. (Conway, AR) (NYSE:HOMB) & University Bancorp (OTCMKTS:UNIB)

Home Bancshares, Inc. (Conway, AR) (NYSE:HOMB) and University Bancorp (OTCMKTS:UNIB) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their valuation, dividends, profitability, institutional ownership, risk, analyst recommendations and earnings.

Insider & Institutional Ownership

67.3% of Home Bancshares, Inc. (Conway, AR) shares are owned by institutional investors. 7.7% of Home Bancshares, Inc. (Conway, AR) shares are owned by company insiders. Comparatively, 63.7% of University Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Home Bancshares, Inc. (Conway, AR) and University Bancorp”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Home Bancshares, Inc. (Conway, AR)	$987.40 million	6.01	$392.93 million	$1.94	15.38
University Bancorp	$105.57 million	0.81	$5.43 million	N/A	N/A

Home Bancshares, Inc. (Conway, AR) has higher revenue and earnings than University Bancorp.

Analyst Recommendations

This is a summary of recent ratings for Home Bancshares, Inc. (Conway, AR) and University Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Home Bancshares, Inc. (Conway, AR)	0	2	2	0	2.50
University Bancorp	0	0	0	0	0.00

Home Bancshares, Inc. (Conway, AR) presently has a consensus target price of $28.25, suggesting a potential downside of 5.33%. Given Home Bancshares, Inc. (Conway, AR)’s stronger consensus rating and higher probable upside, equities analysts clearly believe Home Bancshares, Inc. (Conway, AR) is more favorable than University Bancorp.

Volatility and Risk

Home Bancshares, Inc. (Conway, AR) has a beta of 1.05, meaning that its share price is 5% more volatile than the S&P 500. Comparatively, University Bancorp has a beta of 0.38, meaning that its share price is 62% less volatile than the S&P 500.

Profitability

This table compares Home Bancshares, Inc. (Conway, AR) and University Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Home Bancshares, Inc. (Conway, AR)	26.69%	10.33%	1.75%
University Bancorp	N/A	N/A	N/A

Summary

Home Bancshares, Inc. (Conway, AR) beats University Bancorp on 11 of the 12 factors compared between the two stocks.

About Home Bancshares, Inc. (Conway, AR)

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, 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 provides internet banking, mobile banking and 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. It operates through branches in Arkansas, Florida, Alabama, Texas, and New York City. Home Bancshares, Inc. (Conway, AR) was founded in 1998 and is headquartered in Conway, Arkansas.

About University Bancorp

University Bancorp, Inc. operates as the bank holding company for University Bank that provides various personal, business, and community banking services in the United States. It offers checking, NOW, savings, money market, time deposit, and certificates of deposit accounts. The company's consumer loans include home equity, short term, automobile, personal, and recreational vehicle loans, as well as home equity lines of credits; SBA, commercial real estate, equipment, home improvement, and other instalment loans; and non-profit loans, as well as working capital lines of credit. In addition, the company provides foreign currency exchange; reverse mortgage; online banking and bill pay; online reorder checks; wire transfer; and courier services, as well as credit card and ATM services. Further, it offers life, health, property, and casualty insurance products, as well as investment products, including annuities. University Bancorp, Inc. was founded in 1890 and is based in Ann Arbor, Michigan.