Reviewing Chesapeake Financial Shares (OTCMKTS:CPKF) and Home Bancorp (NASDAQ:HBCP)

Chesapeake Financial Shares (OTCMKTS:CPKF) and Home Bancorp (NASDAQ:HBCP) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, dividends, profitability, earnings, analyst recommendations, valuation and institutional ownership.

Dividends

Chesapeake Financial Shares pays an annual dividend of $0.64 per share and has a dividend yield of 2.8%. Home Bancorp pays an annual dividend of $1.16 per share and has a dividend yield of 2.1%. Chesapeake Financial Shares pays out 69.6% of its earnings in the form of a dividend. Home Bancorp pays out 20.6% 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. Home Bancorp has raised its dividend for 10 consecutive years.

Profitability

This table compares Chesapeake Financial Shares and Home Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Chesapeake Financial Shares	6.72%	11.80%	0.87%
Home Bancorp	21.32%	11.01%	1.28%

Earnings & Valuation

This table compares Chesapeake Financial Shares and Home Bancorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chesapeake Financial Shares	$99.39 million	1.10	$11.43 million	$0.92	25.27
Home Bancorp	$199.39 million	2.19	$36.43 million	$5.62	9.92

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

Insider & Institutional Ownership

3.7% of Chesapeake Financial Shares shares are owned by institutional investors. Comparatively, 49.4% of Home Bancorp shares are owned by institutional investors. 39.5% of Chesapeake Financial Shares shares are owned by insiders. Comparatively, 7.9% of Home Bancorp shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Chesapeake Financial Shares and Home Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chesapeake Financial Shares	0	0	0	0	0.00
Home Bancorp	0	2	3	0	2.60

Home Bancorp has a consensus price target of $59.50, suggesting a potential upside of 6.75%. Given Home Bancorp’s stronger consensus rating and higher possible upside, analysts plainly believe Home Bancorp is more favorable than Chesapeake Financial Shares.

Volatility & Risk

Chesapeake Financial Shares has a beta of 0.29, meaning that its share price is 71% less volatile than the S&P 500. Comparatively, Home Bancorp has a beta of 0.62, meaning that its share price is 38% less volatile than the S&P 500.

Summary

Home Bancorp beats Chesapeake Financial Shares on 13 of the 17 factors compared between the two stocks.

About Chesapeake Financial Shares

Chesapeake Financial Shares, Inc. operates as the bank holding company for Chesapeake Bank that provides various banking products and services for individuals and businesses in the United States. The company accepts interest and noninterest checking, savings, and money market accounts; and variable-rate and fixed-term money market accounts, as well as certificates of deposit. It also offers mortgage, and single-family residential and residential construction loans; commercial loans, which include owner-occupied commercial development, retail, builders/contractors, medical, service and professional, hospitality, nonprofits, marine industry, and agricultural and seafood loans; and consumer and other loans. In addition, the company provides merchant processing, accounts receivable financing, wealth management and trust, and mortgage banking services, as well as cash management services. The company was founded in 1900 and is based in Kilmarnock, Virginia.

About Home Bancorp

Home Bancorp, Inc. operates as the bank holding company for Home Bank, National Association that provides various banking products and services in Louisiana, Mississippi, and Texas. 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 comprising 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. Home Bancorp, Inc. was founded in 1908 and is headquartered in Lafayette, Louisiana.