Financial Contrast: Northeast Community Bancorp (OTCMKTS:NECB) and Home Bancorp (NASDAQ:HBCP)

Home Bancorp (NASDAQ:HBCPGet Rating) and Northeast Community Bancorp (OTCMKTS:NECBGet Rating) are both small-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, risk, profitability, dividends, earnings, valuation and institutional ownership.

Earnings & Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Home Bancorp $123.17 million 2.27 $48.62 million $4.89 6.85
Northeast Community Bancorp $50.76 million 3.48 $11.90 million $0.86 12.56

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

Dividends

Home Bancorp pays an annual dividend of $0.92 per share and has a dividend yield of 2.7%. Northeast Community Bancorp pays an annual dividend of $0.24 per share and has a dividend yield of 2.2%. Home Bancorp pays out 18.8% of its earnings in the form of a dividend. Northeast Community Bancorp pays out 27.9% 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 1 consecutive years. Home Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

47.4% of Home Bancorp shares are held by institutional investors. Comparatively, 30.1% of Northeast Community Bancorp shares are held by institutional investors. 7.0% of Home Bancorp shares are held by insiders. Comparatively, 0.9% of Northeast Community Bancorp shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Volatility & Risk

Home Bancorp has a beta of 0.73, indicating that its share price is 27% less volatile than the S&P 500. Comparatively, Northeast Community Bancorp has a beta of 0.68, indicating that its share price is 32% less volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Home Bancorp 34.21% 11.99% 1.39%
Northeast Community Bancorp 23.74% 5.38% 1.05%

Analyst Ratings

This is a summary of recent ratings and target prices for Home Bancorp and Northeast Community Bancorp, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Home Bancorp 0 0 0 0 N/A
Northeast Community Bancorp 0 0 1 0 3.00

Northeast Community Bancorp has a consensus target price of $12.50, indicating a potential upside of 15.74%. Given Northeast Community Bancorp’s higher possible upside, analysts plainly believe Northeast Community Bancorp is more favorable than Home Bancorp.

Summary

Home Bancorp beats Northeast Community Bancorp on 12 of the 16 factors compared between the two stocks.

About Home Bancorp (Get Rating)

Home Bancorp, Inc. operates as the bank holding company for Home Bank, National Association that provides various banking products and services in Louisiana and Mississippi. 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, such as 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. The company operates through a network of 19 banking offices in the Acadiana, four banking offices in Baton Rouge, six banking offices in the Greater New Orleans area, six banking offices in the Northshore region, and three banking offices in Natchez. Home Bancorp, Inc. was founded in 1908 and is headquartered in Lafayette, Louisiana.

About Northeast Community Bancorp (Get Rating)

Northeast Community Bancorp, Inc. operates as the holding company for NorthEast Community Bank that provides financial services for individuals and businesses. It accepts various deposit instruments, including checking accounts, money market accounts, regular savings accounts, and non-interest bearing demand accounts. The company also offers construction, commercial and industrial, multifamily and mixed-use real estate, non-residential real estate loans, and consumer loans. In addition, it invests in various types of liquid assets, including U.S. Treasury obligations, municipal securities, deposits at the Federal Home Loan Bank of New York, and certificates of deposit of federally insured institutions, as well as securities of various federal agencies, and of state and municipal governments. Further, the company offers investment advisory and financial planning services; and life insurance products and fixed-rate annuities. It operates seven full-service branches in New York and three full-service branches in Massachusetts; and loan production offices in White Plains and New City, New York, as well as Danvers, Massachusetts. The company was founded in 1934 and is based in White Plains, New York.

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