Analyzing Eagle Financial Services (NASDAQ:EFSI) and Home BancShares (NYSE:HOMB)

Eagle Financial Services (NASDAQ:EFSI) and Home BancShares (NYSE:HOMB) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their earnings, risk, institutional ownership, profitability, dividends, analyst recommendations and valuation.

Profitability

This table compares Eagle Financial Services and Home BancShares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Eagle Financial Services	15.81%	10.25%	0.97%
Home BancShares	32.48%	11.11%	2.05%

Valuation & Earnings

This table compares Eagle Financial Services and Home BancShares”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Eagle Financial Services	$82.37 million	2.49	$8.21 million	$3.52	10.77
Home BancShares	$1.48 billion	3.52	$475.44 million	$2.43	10.89

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

Insider and Institutional Ownership

0.3% of Eagle Financial Services shares are owned by institutional investors. Comparatively, 67.3% of Home BancShares shares are owned by institutional investors. 7.1% of Eagle Financial Services shares are owned by insiders. Comparatively, 6.4% of Home BancShares shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

Eagle Financial Services pays an annual dividend of $1.24 per share and has a dividend yield of 3.3%. Home BancShares pays an annual dividend of $0.84 per share and has a dividend yield of 3.2%. Eagle Financial Services pays out 35.2% of its earnings in the form of a dividend. Home BancShares pays out 34.6% 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. Eagle Financial Services has increased its dividend for 14 consecutive years and Home BancShares has increased its dividend for 15 consecutive years.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Eagle Financial Services and Home BancShares, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Eagle Financial Services	0	4	1	0	2.20
Home BancShares	0	3	3	0	2.50

Eagle Financial Services currently has a consensus price target of $42.25, suggesting a potential upside of 11.48%. Home BancShares has a consensus price target of $31.40, suggesting a potential upside of 18.64%. Given Home BancShares’ stronger consensus rating and higher probable upside, analysts plainly believe Home BancShares is more favorable than Eagle Financial Services.

Volatility & Risk

Eagle Financial Services has a beta of 0.19, suggesting that its stock price is 81% less volatile than the S&P 500. Comparatively, Home BancShares has a beta of 0.75, suggesting that its stock price is 25% less volatile than the S&P 500.

Summary

Home BancShares beats Eagle Financial Services on 14 of the 17 factors compared between the two stocks.

About Eagle Financial Services

Eagle Financial Services, Inc. operates as the bank holding company for Bank of Clarke County that provides various retail and commercial banking products and services in the Shenandoah Valley and Northern Virginia. The company’s deposit products include checking, NOW, money market, and regular savings accounts; and demand and time deposits. Its loan portfolio comprises one-to-four-family residential real estate, commercial real estate, construction and land development, and commercial and industrial loans, as well as secured and unsecured consumer loans, which include personal installment loans, personal lines of credit, automobile loans, and credit card loans. The company also offers personal and retirement plan services; investment services comprising tax-deferred annuities, IRAs and rollovers, mutual funds, retirement plans, college savings plans, life insurance, long term care insurance, fixed income investing, brokerage CDs, and full service or discount brokerage services; non-deposit investment products; and title insurance products. In addition, it provides ATM and debit cards; and telephone, internet, and mobile banking services, as well as other commercial deposit account services, such as ACH origination and remote deposit capture services. The company operates through twelve full-service branches, two loan production offices, one wealth management office, and one drive-through only facility, as well as 13 ATM locations in the Virginia communities of Berryville, Winchester, Boyce, Stephens City, Purcellville, Warrenton, Leesburg, Ashburn, and Fairfax. Eagle Financial Services, Inc. was founded in 1881 and is headquartered in Berryville, Virginia.

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, 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.