Comparing HomeStreet (HMST) & TrustCo Bank (TRST)

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

Profitability

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This table compares HomeStreet and TrustCo Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
HomeStreet	12.13%	6.60%	0.67%
TrustCo Bank	24.77%	11.44%	1.06%

Risk & Volatility

HomeStreet has a beta of 0.37, suggesting that its stock price is 63% less volatile than the S&P 500. Comparatively, TrustCo Bank has a beta of 1.05, suggesting that its stock price is 5% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations for HomeStreet and TrustCo Bank, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HomeStreet	0	6	0	0	2.00
TrustCo Bank	0	2	0	0	2.00

HomeStreet currently has a consensus target price of $29.04, suggesting a potential upside of 3.35%. TrustCo Bank has a consensus target price of $9.25, suggesting a potential upside of 4.52%. Given TrustCo Bank’s higher probable upside, analysts clearly believe TrustCo Bank is more favorable than HomeStreet.

Valuation and Earnings

This table compares HomeStreet and TrustCo Bank’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HomeStreet	$549.84 million	1.38	$68.94 million	$1.68	16.73
TrustCo Bank	$187.33 million	4.56	$43.14 million	N/A	N/A

HomeStreet has higher revenue and earnings than TrustCo Bank.

Dividends

TrustCo Bank pays an annual dividend of $0.26 per share and has a dividend yield of 2.9%. HomeStreet does not pay a dividend.

Insider and Institutional Ownership

81.5% of HomeStreet shares are owned by institutional investors. Comparatively, 60.1% of TrustCo Bank shares are owned by institutional investors. 1.6% of HomeStreet shares are owned by insiders. Comparatively, 3.8% of TrustCo Bank shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

TrustCo Bank beats HomeStreet on 8 of the 12 factors compared between the two stocks.

HomeStreet Company Profile

HomeStreet, Inc., together with its subsidiaries, provides various financial services primarily in the Pacific Northwest, California, and Hawaii. The company operates in two segments, Commercial and Consumer Banking, and Mortgage Banking. The Commercial and Consumer Banking segment offers deposit products; non-deposit investment products; and insurance products and cash management services. It also originates consumer loans, single family residential mortgages, loans secured by commercial real estate, construction loans for residential and commercial real estate projects, commercial business loans, and agricultural loans; and bridge loans and permanent loans primarily on single family residences, as well as on office, retail, industrial, and multifamily property types. This segment provides its products and services through bank branches, lending centers, and ATMs, as well as through online, mobile, and telephone banking. The Mortgage Banking segment originates and purchases single family residential mortgage loans for sale in the secondary market. This segment is also involved in the sale of loans on a servicing-released and servicing-retained basis to securitizers and correspondent lenders. The company also offers insurance products and services for consumers. As of December 31, 2017, it had a network of 59 retail deposit branches located in Washington state, Southern California, Portland, Oregon, and Hawaii; and 44 primary stand-alone home loan centers and 6 primary commercial lending centers. The company was formerly known as Continental Mortgage and Loan Company. HomeStreet, Inc. was founded in 1921 and is headquartered in Seattle, Washington.

TrustCo Bank Company Profile

TrustCo Bank Corp NY operates as the holding company for Trustco Bank that provides personal and business banking services to individuals, partnerships, and corporations. The company is primarily involved in accepting deposits, and making loans and investments. It also operates as a real estate investment trust that acquires, holds, and manages real estate mortgage assets, including residential mortgage loans and mortgage backed securities. In addition, the company serves as the executor of estates and trustee of personal trusts; provides asset and wealth management, estate planning and related advice, and custodial services; and acts as trustee for various types of employee benefit plans, and corporate pension and profit sharing trusts. Further, it provides retirement planning services; and operates 157 automatic teller machines. As of February 20, 2018, it operated 145 offices in New York, Florida, Massachusetts, New Jersey, and Vermont. TrustCo Bank Corp NY was founded in 1902 and is headquartered in Glenville, New York.