Metropolitan Bank (NYSE:MCB) and Home BancShares (NYSE:HOMB) Head to Head Review

Home BancShares (NYSE:HOMB) and Metropolitan Bank (NYSE:MCB) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their profitability, earnings, valuation, institutional ownership, dividends, analyst recommendations and risk.

Earnings and Valuation

This table compares Home BancShares and Metropolitan Bank”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Home BancShares	$1.48 billion	3.82	$475.44 million	$2.42	11.64
Metropolitan Bank	$527.15 million	2.05	$71.10 million	$7.90	11.01

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

Risk & Volatility

Home BancShares has a beta of 0.72, indicating that its stock price is 28% less volatile than the S&P 500. Comparatively, Metropolitan Bank has a beta of 1.03, indicating that its stock price is 3% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Home BancShares and Metropolitan Bank, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Home BancShares	0	4	5	0	2.56
Metropolitan Bank	0	1	2	1	3.00

Home BancShares presently has a consensus target price of $33.00, indicating a potential upside of 17.12%. Metropolitan Bank has a consensus target price of $105.00, indicating a potential upside of 20.74%. Given Metropolitan Bank’s stronger consensus rating and higher possible upside, analysts plainly believe Metropolitan Bank is more favorable than Home BancShares.

Profitability

This table compares Home BancShares and Metropolitan Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Home BancShares	32.10%	11.12%	2.07%
Metropolitan Bank	14.31%	10.22%	1.01%

Insider and Institutional Ownership

67.3% of Home BancShares shares are owned by institutional investors. Comparatively, 79.8% of Metropolitan Bank shares are owned by institutional investors. 6.4% of Home BancShares shares are owned by company insiders. Comparatively, 5.5% of Metropolitan Bank shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Dividends

Home BancShares pays an annual dividend of $0.92 per share and has a dividend yield of 3.3%. Metropolitan Bank pays an annual dividend of $1.40 per share and has a dividend yield of 1.6%. Home BancShares pays out 38.0% of its earnings in the form of a dividend. Metropolitan Bank pays out 17.7% 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 BancShares has increased its dividend for 15 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 Metropolitan Bank on 11 of the 18 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, 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 Metropolitan Bank

Metropolitan Bank Holding Corp. operates as the bank holding company for Metropolitan Commercial Bank that provides a range of business, commercial, and retail banking products and services to small businesses, middle-market enterprises, public entities, and individuals in the New York metropolitan area. The company offers checking, savings, term deposit, money market, demand deposit, and other interest-bearing transaction accounts. It also provides lending products, including commercial real estate, multi-family, construction, and one-to four-family real estate loans; commercial and industrial loans; consumer loans; acquisition and renovation loans; loans to refinance or return borrower equity; loans on owner-occupied properties; working capital lines of credit; trade finance and letters of credit; and term loans. In addition, the company offers cash management services, as well as online and mobile banking, ACH, remote deposit capture, and debit cards. The company was formerly known as Metbank Holding Corp. and changed its name to Metropolitan Bank Holding Corp. in January 2007. Metropolitan Bank Holding Corp. was incorporated in 1997 and is headquartered in New York, New York.