Territorial Bancorp (NASDAQ: HTBI) and Hometrust Bancshares (NASDAQ:HTBI) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, profitability, valuation, dividends and risk.

Profitability

This table compares Territorial Bancorp and Hometrust Bancshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Territorial Bancorp 21.63% 7.74% 0.90%
Hometrust Bancshares 6.04% 6.46% 0.80%

Analyst Recommendations

This is a summary of current ratings and target prices for Territorial Bancorp and Hometrust Bancshares, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Territorial Bancorp 0 2 0 0 2.00
Hometrust Bancshares 0 2 0 0 2.00

Territorial Bancorp currently has a consensus target price of $32.00, suggesting a potential upside of 7.71%. Hometrust Bancshares has a consensus target price of $27.50, suggesting a potential downside of 5.82%. Given Territorial Bancorp’s higher possible upside, research analysts clearly believe Territorial Bancorp is more favorable than Hometrust Bancshares.

Valuation & Earnings

This table compares Territorial Bancorp and Hometrust Bancshares’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Territorial Bancorp $72.18 million 4.01 $14.96 million $1.78 16.69
Hometrust Bancshares $136.37 million 4.08 $8.23 million $1.38 21.16

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

Insider and Institutional Ownership

44.1% of Territorial Bancorp shares are owned by institutional investors. Comparatively, 60.8% of Hometrust Bancshares shares are owned by institutional investors. 13.1% of Territorial Bancorp shares are owned by company insiders. Comparatively, 6.3% of Hometrust Bancshares shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Volatility & Risk

Territorial Bancorp has a beta of 0.21, suggesting that its stock price is 79% less volatile than the S&P 500. Comparatively, Hometrust Bancshares has a beta of 0.31, suggesting that its stock price is 69% less volatile than the S&P 500.

Dividends

Territorial Bancorp pays an annual dividend of $0.88 per share and has a dividend yield of 3.0%. Hometrust Bancshares does not pay a dividend. Territorial Bancorp pays out 49.4% of its earnings in the form of a dividend. Territorial Bancorp has raised its dividend for 5 consecutive years.

Summary

Territorial Bancorp beats Hometrust Bancshares on 9 of the 15 factors compared between the two stocks.

Territorial Bancorp Company Profile

Territorial Bancorp Inc. operates as the holding company for Territorial Savings Bank that provides various financial services to individuals, families, and businesses. The company offers a range of deposit accounts, including passbook and statement savings accounts, certificates of deposit, money market accounts, commercial and regular checking accounts, and NOW accounts. It also provides various loan products comprising one- to four-family residential mortgage loans; home equity loans and lines of credit; construction, commercial, and other non-residential real estate loans; consumer loans; multi-family mortgage loans; commercial business loans; and other loans, as well as offers investment securities. In addition, the company, through its subsidiary, Territorial Financial Services, Inc. engages in insurance agency activities. Further, it provides various non-deposit investments, including annuities and mutual funds through a third-party broker-dealer. The company operates through a network of 29 full-service branches located in the State of Hawaii. Territorial Bancorp Inc. was founded in 1921 and is based in Honolulu, Hawaii.

Hometrust Bancshares Company Profile

HomeTrust Bancshares, Inc. operates as the bank holding company for HomeTrust Bank that provides a range of retail and commercial banking products. Its deposit products consist of savings, money market, and demand accounts, as well as certificates of deposit for individuals, businesses, and nonprofit organizations. The company's loan portfolio comprises retail consumer loans, such as one-to-four-family residential property lending, home equity lines of credit, construction and land/lots, indirect auto finance, and consumer lending; and commercial loans, including commercial real estate lending, construction and development lending, and commercial and industrial loans. It also provides ground and equipment lease financing to fire departments. As of June 30, 2017, the company operated 42 offices in North Carolina, Upstate South Carolina, East Tennessee, and Southwest Virginia. HomeTrust Bancshares, Inc. was founded in 1926 and is headquartered in Asheville, North Carolina.

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