First Financial (NASDAQ:THFF) & HomeStreet (NASDAQ:HMST) Financial Comparison

First Financial (NASDAQ:THFF) and HomeStreet (NASDAQ:HMST) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, analyst recommendations, earnings, risk, profitability, valuation and institutional ownership.

Insider & Institutional Ownership

72.7% of First Financial shares are owned by institutional investors. Comparatively, 74.7% of HomeStreet shares are owned by institutional investors. 4.1% of First Financial shares are owned by company insiders. Comparatively, 4.6% of HomeStreet shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for First Financial and HomeStreet, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Financial	0	1	1	0	2.50
HomeStreet	0	2	1	0	2.33

First Financial presently has a consensus target price of $54.50, suggesting a potential upside of 4.77%. HomeStreet has a consensus target price of $14.33, suggesting a potential upside of 35.48%. Given HomeStreet’s higher probable upside, analysts plainly believe HomeStreet is more favorable than First Financial.

Volatility and Risk

First Financial has a beta of 0.5, suggesting that its stock price is 50% less volatile than the S&P 500. Comparatively, HomeStreet has a beta of 1.46, suggesting that its stock price is 46% more volatile than the S&P 500.

Earnings & Valuation

This table compares First Financial and HomeStreet”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Financial	$271.10 million	2.27	$60.67 million	$3.69	14.10
HomeStreet	$358.19 million	0.56	-$144.34 million	($7.66)	-1.38

First Financial has higher earnings, but lower revenue than HomeStreet. HomeStreet is trading at a lower price-to-earnings ratio than First Financial, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares First Financial and HomeStreet’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Financial	14.86%	8.10%	0.87%
HomeStreet	-40.30%	-4.23%	-0.23%

Summary

First Financial beats HomeStreet on 8 of the 13 factors compared between the two stocks.

About First Financial

First Financial Corporation, through its subsidiaries, provides various financial services. The company offers non-interest-bearing demand, interest-bearing demand, savings, time, and other time deposits. It also provides commercial loans primarily to expand a business or finance asset purchases; residential real estate and residential real estate construction loans; and home equity loans and lines, secured loans, and cash/CD secured and unsecured loans. In addition, the company offers lease financing, trust account, depositor, and insurance services. The company was founded in 1834 and is headquartered in Terre Haute, Indiana.

About HomeStreet

HomeStreet, Inc. operates as the bank holding company for HomeStreet Bank that provides commercial, mortgage, and consumer/retail banking services in the Western United States. The company offers personal and business checking, savings, interest-bearing negotiable order of withdrawal, and money market accounts, as well as certificates of deposit; credit cards; insurance; and treasury management services. Its loan products include commercial real estate (CRE), multifamily, construction and land development, owner occupied CRE and commercial business loans; and single family, home equity, and other loans. In addition, the company offers online, mobile, and telephone banking. It serves small and medium sized businesses, real estate investors, professional firms, and individuals. The company operates through branches and ATMs. The company was formerly known as Continental Mortgage and Loan Company. HomeStreet, Inc. was incorporated in 1921 and is headquartered in Seattle, Washington.