Bankwell Financial Group (NASDAQ: HOMB) and Home Bancshares (NASDAQ:HOMB) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, risk, valuation, profitability and institutional ownership.

Profitability

This table compares Bankwell Financial Group and Home Bancshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Bankwell Financial Group 19.62% 10.79% 0.97%
Home Bancshares 26.27% 11.41% 1.77%

Volatility and Risk

Bankwell Financial Group has a beta of 0.41, meaning that its share price is 59% less volatile than the S&P 500. Comparatively, Home Bancshares has a beta of 1.17, meaning that its share price is 17% more volatile than the S&P 500.

Insider and Institutional Ownership

48.2% of Bankwell Financial Group shares are held by institutional investors. Comparatively, 64.4% of Home Bancshares shares are held by institutional investors. 21.9% of Bankwell Financial Group shares are held by company insiders. Comparatively, 9.2% of Home Bancshares shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Bankwell Financial Group and Home Bancshares’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Bankwell Financial Group $75.83 million 3.24 $13.83 million $2.03 15.45
Home Bancshares $619.89 million 6.47 $135.08 million $1.35 17.02

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

Analyst Ratings

This is a summary of current ratings and recommmendations for Bankwell Financial Group and Home Bancshares, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bankwell Financial Group 0 2 1 0 2.33
Home Bancshares 0 1 5 0 2.83

Bankwell Financial Group presently has a consensus price target of $35.50, indicating a potential upside of 13.20%. Home Bancshares has a consensus price target of $27.60, indicating a potential upside of 20.10%. Given Home Bancshares’ stronger consensus rating and higher possible upside, analysts plainly believe Home Bancshares is more favorable than Bankwell Financial Group.

Dividends

Bankwell Financial Group pays an annual dividend of $0.48 per share and has a dividend yield of 1.5%. Home Bancshares pays an annual dividend of $0.48 per share and has a dividend yield of 2.1%. Bankwell Financial Group pays out 23.6% of its earnings in the form of a dividend. Home Bancshares pays out 35.6% 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. Bankwell Financial Group has raised its dividend for 2 consecutive years and Home Bancshares has raised its dividend for 7 consecutive years. Home Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Home Bancshares beats Bankwell Financial Group on 14 of the 17 factors compared between the two stocks.

About Bankwell Financial Group

Bankwell Financial Group, Inc. operates as the bank holding company for Bankwell Bank that provides a range of banking services to commercial and consumer customers in Connecticut. It accepts checking, savings, and money market accounts; and demand and NOW deposits, as well as certificates of deposit. The company also provides commercial lending products, including residential real estate loans, owner-occupied commercial real estate loans, commercial real estate investment loans, business term loans, equipment financing, and lines of credit to small and mid-sized businesses, as well as real estate construction and development loans; and consumer loans, such as loans secured by savings or certificate accounts, or automobiles, as well as unsecured personal loans and overdraft lines of credit. It operates through a network of nine branches. The company was formerly known as BNC Financial Group, Inc. and changed its name to Bankwell Financial Group, Inc. in September 2013. Bankwell Financial Group, Inc. was founded in 2002 and is headquartered in New Canaan, Connecticut.

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, 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, 2017, it operated through 170 branch locations, including 76 branches in Arkansas, 88 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.

Receive News & Ratings for Bankwell Financial Group Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Bankwell Financial Group and related companies with MarketBeat.com's FREE daily email newsletter.