Provident Financial (NASDAQ:PROV) vs. HomeTrust Bancshares (NASDAQ:HTBI) Critical Survey

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

Analyst Ratings

This is a breakdown of current recommendations and price targets for Provident Financial and HomeTrust Bancshares, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Provident Financial 0 4 0 0 2.00
HomeTrust Bancshares 0 2 0 0 2.00

Provident Financial currently has a consensus target price of $15.50, suggesting a potential downside of 8.82%. HomeTrust Bancshares has a consensus target price of $15.25, suggesting a potential downside of 39.12%. Given Provident Financial’s higher probable upside, research analysts clearly believe Provident Financial is more favorable than HomeTrust Bancshares.

Volatility and Risk

Provident Financial has a beta of 0.63, suggesting that its stock price is 37% less volatile than the S&P 500. Comparatively, HomeTrust Bancshares has a beta of 0.68, suggesting that its stock price is 32% less volatile than the S&P 500.

Dividends

Provident Financial pays an annual dividend of $0.56 per share and has a dividend yield of 3.3%. HomeTrust Bancshares pays an annual dividend of $0.32 per share and has a dividend yield of 1.3%. Provident Financial pays out 55.4% of its earnings in the form of a dividend. HomeTrust Bancshares pays out 24.6% 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. Provident Financial has raised its dividend for 1 consecutive years and HomeTrust Bancshares has raised its dividend for 2 consecutive years.

Profitability

This table compares Provident Financial and HomeTrust Bancshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Provident Financial 14.53% 5.34% 0.58%
HomeTrust Bancshares 12.20% 4.84% 0.55%

Institutional and Insider Ownership

57.8% of Provident Financial shares are held by institutional investors. Comparatively, 59.1% of HomeTrust Bancshares shares are held by institutional investors. 14.7% of Provident Financial shares are held by company insiders. Comparatively, 7.3% of HomeTrust Bancshares shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Provident Financial and HomeTrust Bancshares’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Provident Financial $46.98 million 2.68 $7.69 million $1.01 16.77
HomeTrust Bancshares $166.59 million 2.51 $22.78 million $1.30 19.27

HomeTrust Bancshares has higher revenue and earnings than Provident Financial. Provident Financial is trading at a lower price-to-earnings ratio than HomeTrust Bancshares, indicating that it is currently the more affordable of the two stocks.

Summary

HomeTrust Bancshares beats Provident Financial on 8 of the 15 factors compared between the two stocks.

About Provident Financial

Provident Financial Holdings, Inc. operates as the holding company for Provident Savings Bank, F.S.B. that provides community banking services to consumers and small to mid-sized businesses in the Inland Empire region of Southern California. Its deposit products include checking, savings, and money market accounts, as well as time deposits; and loan portfolio consists of multi-family, commercial real estate, construction, commercial business, and consumer loans. The company also offers investment services comprising the sale of investment products, such as annuities and mutual funds; and trustee services for real estate transactions. It operates through 12 full-service banking offices in Riverside County and 1 full-service banking office in San Bernardino County. The company was founded in 1956 and is based in Riverside, California.

About HomeTrust Bancshares

HomeTrust Bancshares, Inc. operates as the bank holding company for HomeTrust Bank that provides a range of retail and commercial banking products and services. Its deposit products include 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 real estate lending, home equity lines of credit, construction and land/lots, indirect auto finance, and consumer lending; and commercial loans that include commercial real estate lending, construction and development lending, and commercial and industrial loans. It also provides small business administration loans, equipment finance leases, indirect automobile loans, and municipal leases; and cash management and online/mobile banking services. As of June 30, 2020, the company operated 41 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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