First Financial Northwest (NASDAQ:FFNW) versus Home Bancshares, Inc. (Conway, AR) (NYSE:HOMB) Head to Head Survey

Home Bancshares, Inc. (Conway, AR) (NYSE:HOMB) and First Financial Northwest (NASDAQ:FFNW) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, earnings, valuation, dividends, profitability, risk and analyst recommendations.

Volatility & Risk

Home Bancshares, Inc. (Conway, AR) has a beta of 1.08, suggesting that its share price is 8% more volatile than the S&P 500. Comparatively, First Financial Northwest has a beta of 0.52, suggesting that its share price is 48% less volatile than the S&P 500.

Institutional and Insider Ownership

67.3% of Home Bancshares, Inc. (Conway, AR) shares are owned by institutional investors. Comparatively, 55.0% of First Financial Northwest shares are owned by institutional investors. 7.7% of Home Bancshares, Inc. (Conway, AR) shares are owned by company insiders. Comparatively, 7.2% of First Financial Northwest shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Home Bancshares, Inc. (Conway, AR)	26.69%	10.33%	1.75%
First Financial Northwest	1.31%	0.66%	0.07%

Valuation & Earnings

This table compares Home Bancshares, Inc. (Conway, AR) and First Financial Northwest”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Home Bancshares, Inc. (Conway, AR)	$1.34 billion	4.61	$392.93 million	$1.94	16.08
First Financial Northwest	$80.93 million	2.54	$6.30 million	$0.11	202.75

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

Dividends

Home Bancshares, Inc. (Conway, AR) pays an annual dividend of $0.78 per share and has a dividend yield of 2.5%. First Financial Northwest pays an annual dividend of $0.39 per share and has a dividend yield of 1.7%. Home Bancshares, Inc. (Conway, AR) pays out 40.2% of its earnings in the form of a dividend. First Financial Northwest pays out 354.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Home Bancshares, Inc. (Conway, AR) has increased its dividend for 14 consecutive years. Home Bancshares, Inc. (Conway, AR) is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of current recommendations for Home Bancshares, Inc. (Conway, AR) and First Financial Northwest, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Home Bancshares, Inc. (Conway, AR)	0	1	2	0	2.67
First Financial Northwest	0	3	0	0	2.00

Home Bancshares, Inc. (Conway, AR) currently has a consensus price target of $30.00, suggesting a potential downside of 3.82%. First Financial Northwest has a consensus price target of $23.00, suggesting a potential upside of 3.14%. Given First Financial Northwest’s higher probable upside, analysts plainly believe First Financial Northwest is more favorable than Home Bancshares, Inc. (Conway, AR).

Summary

Home Bancshares, Inc. (Conway, AR) beats First Financial Northwest on 15 of the 17 factors compared between the two stocks.

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.

About First Financial Northwest

First Financial Northwest, Inc. operates as the bank holding company for First Financial Northwest Bank that provides commercial banking services in Washington. The company offers a range of deposit products, including noninterest-bearing accounts, interest-bearing demand accounts, money market accounts, savings accounts, and certificates of deposit. Its loan products comprise one-to-four family residential loans; multifamily and commercial real estate loans; construction/land loans; business loans; and consumer loans, such as home equity loans, lines of credit, second mortgage term loans, auto loans, and savings account loans. The company also provides wealth management services; and online banking services, as well as debit cards and ATMs. The company was founded in 1923 and is headquartered in Renton, Washington.