Reviewing Home BancShares (NYSE:HOMB) and Customers Bancorp (NYSE:CUBI)

Customers Bancorp (NYSE:CUBI) and Home BancShares (NYSE:HOMB) are both mid-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, institutional ownership, analyst recommendations, dividends, valuation, earnings and profitability.

Institutional & Insider Ownership

89.3% of Customers Bancorp shares are held by institutional investors. Comparatively, 67.3% of Home BancShares shares are held by institutional investors. 8.7% of Customers Bancorp shares are held by company insiders. Comparatively, 6.4% of Home BancShares shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Customers Bancorp and Home BancShares”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Customers Bancorp	$1.48 billion	1.71	$224.09 million	$6.20	11.92
Home BancShares	$1.48 billion	3.73	$475.44 million	$2.41	11.62

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

Profitability

This table compares Customers Bancorp and Home BancShares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Customers Bancorp	15.15%	14.05%	1.14%
Home BancShares	32.18%	11.16%	2.03%

Risk & Volatility

Customers Bancorp has a beta of 1.57, meaning that its stock price is 57% more volatile than the S&P 500. Comparatively, Home BancShares has a beta of 0.75, meaning that its stock price is 25% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Customers Bancorp and Home BancShares, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Customers Bancorp	0	5	6	1	2.67
Home BancShares	0	4	3	0	2.43

Customers Bancorp currently has a consensus price target of $86.42, indicating a potential upside of 16.96%. Home BancShares has a consensus price target of $32.40, indicating a potential upside of 15.69%. Given Customers Bancorp’s stronger consensus rating and higher probable upside, analysts clearly believe Customers Bancorp is more favorable than Home BancShares.

Summary

Customers Bancorp beats Home BancShares on 11 of the 15 factors compared between the two stocks.

About Customers Bancorp

Customers Bancorp, Inc. operates as the bank holding company for Customers Bank that provides financial products and services to individual consumers, and small and middle market businesses. The company provides deposit banking products, which includes commercial and consumer checking, non-interest-bearing and interest-bearing demand, MMDA, savings, and time deposit accounts. Its lending business offers commercial and industrial, commercial real estate, and multifamily and residential mortgage loans; SBA lending and financing; specialty lending includes fund finance, real estate specialty finance, technology and venture, and healthcare and financial institutions group; commercial loans to mortgage companies, and commercial equipment financing; and fund finance, such as variable rate loans secured by collateral pools to private debt funds; and cash management services. In addition, the company provides digital banking including Banking-as-a-Service to fintech companies, payments and treasury services to businesses, and consumer loans through fintech companies and the TassatPay, a blockchain-based instant B2B payments platform which offers instant payments including over-the-counter desks, exchanges, liquidity providers, market makers, funds, and other B2B verticals. Further, it offers mobile phone and internet banking, wire transfers, electronic bill payment, lock box, remote deposit capture, courier, merchant processing, cash vault, controlled disbursements, positive pay, and cash management services, such as account reconciliation, collections, and sweep accounts. The company was incorporated in 2010 and is headquartered in West Reading, Pennsylvania.

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.