Reviewing Prime Meridian (OTCMKTS:PMHG) and Home Bancshares, Inc. (Conway, AR) (NYSE:HOMB)

Prime Meridian (OTCMKTS:PMHG) and Home Bancshares, Inc. (Conway, AR) (NYSE:HOMB) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, institutional ownership, dividends, risk, valuation, profitability and analyst recommendations.

Insider & Institutional Ownership

11.8% of Prime Meridian shares are owned by institutional investors. Comparatively, 67.3% of Home Bancshares, Inc. (Conway, AR) shares are owned by institutional investors. 25.9% of Prime Meridian shares are owned by company insiders. Comparatively, 7.7% of Home Bancshares, Inc. (Conway, AR) shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings and target prices for Prime Meridian and Home Bancshares, Inc. (Conway, AR), as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Prime Meridian	0	0	0	0	0.00
Home Bancshares, Inc. (Conway, AR)	0	2	3	0	2.60

Home Bancshares, Inc. (Conway, AR) has a consensus price target of $32.00, suggesting a potential upside of 10.67%. Given Home Bancshares, Inc. (Conway, AR)’s stronger consensus rating and higher possible upside, analysts plainly believe Home Bancshares, Inc. (Conway, AR) is more favorable than Prime Meridian.

Dividends

Prime Meridian pays an annual dividend of $1.00 per share and has a dividend yield of 3.5%. Home Bancshares, Inc. (Conway, AR) pays an annual dividend of $0.78 per share and has a dividend yield of 2.7%. Prime Meridian pays out 39.1% of its earnings in the form of a dividend. Home Bancshares, Inc. (Conway, AR) pays out 38.6% 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 Bancshares, Inc. (Conway, AR) has raised its dividend for 14 consecutive years.

Volatility & Risk

Prime Meridian has a beta of 0.51, indicating that its share price is 49% less volatile than the S&P 500. Comparatively, Home Bancshares, Inc. (Conway, AR) has a beta of 1.08, indicating that its share price is 8% more volatile than the S&P 500.

Valuation and Earnings

This table compares Prime Meridian and Home Bancshares, Inc. (Conway, AR)”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Prime Meridian	$50.36 million	1.87	$8.49 million	$2.56	11.09
Home Bancshares, Inc. (Conway, AR)	$1.00 billion	5.74	$402.24 million	$2.02	14.31

Home Bancshares, Inc. (Conway, AR) has higher revenue and earnings than Prime Meridian. Prime Meridian is trading at a lower price-to-earnings ratio than Home Bancshares, Inc. (Conway, AR), indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Prime Meridian and Home Bancshares, Inc. (Conway, AR)’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Prime Meridian	16.86%	10.05%	0.95%
Home Bancshares, Inc. (Conway, AR)	27.39%	10.31%	1.77%

Summary

Home Bancshares, Inc. (Conway, AR) beats Prime Meridian on 14 of the 17 factors compared between the two stocks.

About Prime Meridian

Prime Meridian Holding Company operates as the bank holding company for Prime Meridian Bank that provides various consumer and commercial banking services to individuals and businesses. The company accepts various deposits, such as checking, money market, savings, term certificate of deposit, demand interest-bearing and noninterest-bearing, health savings, NOW, and escrow accounts, as well as retirement savings plans and time deposits. Its loan products include commercial real estate, residential real estate and home equity, small business administration, construction, equipment, and commercial loans; and consumer and other loans comprising financing of automobiles, boats, and recreational vehicles, as well as issues standby letters and business lines of credit. The company also offers debit and credit cards; mobile banking, remote and mobile deposit, Apple Pay, bank-to-bank transfer, and online banking services; and safe deposit, wire transfer, foreign exchange, direct deposits, notary, night depository, official checks, domestic collections, bank drafts, automated teller services, drive-in tellers, merchant card, and banking by mail services, as well as invests in securities. Prime Meridian Holding Company was founded in 2008 and is headquartered in Tallahassee, Florida.

About Home Bancshares, Inc. (Conway, AR)

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.