Comparing Hilltop (NYSE:HTH) and Eagle Financial Services (NASDAQ:EFSI)

Hilltop (NYSE:HTH) and Eagle Financial Services (NASDAQ:EFSI) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, valuation, analyst recommendations, risk, institutional ownership, earnings and profitability.

Dividends

Hilltop pays an annual dividend of $0.80 per share and has a dividend yield of 2.2%. Eagle Financial Services pays an annual dividend of $1.24 per share and has a dividend yield of 3.3%. Hilltop pays out 30.3% of its earnings in the form of a dividend. Eagle Financial Services pays out 35.2% 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. Hilltop has raised its dividend for 8 consecutive years and Eagle Financial Services has raised its dividend for 14 consecutive years. Eagle Financial Services is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares Hilltop and Eagle Financial Services”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hilltop	$1.63 billion	1.31	$165.59 million	$2.64	13.82
Eagle Financial Services	$105.89 million	1.90	$8.21 million	$3.52	10.57

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

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Hilltop and Eagle Financial Services, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hilltop	0	2	1	1	2.75
Eagle Financial Services	1	2	1	1	2.40

Hilltop presently has a consensus price target of $37.50, suggesting a potential upside of 2.79%. Eagle Financial Services has a consensus price target of $42.25, suggesting a potential upside of 13.61%. Given Eagle Financial Services’ higher probable upside, analysts clearly believe Eagle Financial Services is more favorable than Hilltop.

Risk & Volatility

Hilltop has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500. Comparatively, Eagle Financial Services has a beta of 0.22, meaning that its stock price is 78% less volatile than the S&P 500.

Profitability

This table compares Hilltop and Eagle Financial Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hilltop	10.13%	7.32%	1.03%
Eagle Financial Services	15.81%	10.17%	0.98%

Institutional and Insider Ownership

57.1% of Hilltop shares are held by institutional investors. Comparatively, 0.3% of Eagle Financial Services shares are held by institutional investors. 29.9% of Hilltop shares are held by insiders. Comparatively, 7.1% of Eagle Financial Services shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Hilltop beats Eagle Financial Services on 9 of the 16 factors compared between the two stocks.

About Hilltop

Hilltop Holdings Inc. provides business and consumer banking services. It operates through three segments: Banking, Broker-Dealer, and Mortgage Origination. The Banking segment offers savings, checking, interest-bearing checking, and money market accounts; certificates of deposit; lines and letters of credit, home improvement and equity loans, loans for purchasing and carrying securities, term, agricultural and commercial real estate, equipment loans, and other lending products; and mortgage, commercial and industrial loans, and term and construction finance. It also provides treasury management, asset management, check cards, safe deposit boxes, online banking, bill pay, and overdraft privilege services; and estate planning, management and administration, investment portfolio management, employee benefit accounts, and individual retirement accounts services, as well as automated teller machines. The Broker-Dealer segment offers public finance services that assist public entities in originating, syndicating, and distributing securities of municipalities and political subdivisions; specialized advisory and investment banking services; advice and guidance to arbitrage rebate compliance, portfolio management, and local government investment pool administration; advisory services and products for derivatives and commodities; agricultural insurance; and sells, trades in, and underwrites U.S. government and government agency bonds, corporate bonds, and municipal bonds; mortgage-backed, asset-backed, and commercial mortgage-backed securities and structured products; and provides asset and liability management advisory, clearing, retail, and securities lending services. The Mortgage Origination segment offers fixed and adjustable rate mortgages, jumbo, new construction, Federal Housing Administration, Veterans Affairs, and United States Department of Agriculture loans. Hilltop Holdings Inc. was incorporated in 1998 and is based in Dallas, Texas.

About Eagle Financial Services

Eagle Financial Services, Inc. operates as the bank holding company for Bank of Clarke County that provides various retail and commercial banking products and services in the Shenandoah Valley and Northern Virginia. The company’s deposit products include checking, NOW, money market, and regular savings accounts; and demand and time deposits. Its loan portfolio comprises one-to-four-family residential real estate, commercial real estate, construction and land development, and commercial and industrial loans, as well as secured and unsecured consumer loans, which include personal installment loans, personal lines of credit, automobile loans, and credit card loans. The company also offers personal and retirement plan services; investment services comprising tax-deferred annuities, IRAs and rollovers, mutual funds, retirement plans, college savings plans, life insurance, long term care insurance, fixed income investing, brokerage CDs, and full service or discount brokerage services; non-deposit investment products; and title insurance products. In addition, it provides ATM and debit cards; and telephone, internet, and mobile banking services, as well as other commercial deposit account services, such as ACH origination and remote deposit capture services. The company operates through twelve full-service branches, two loan production offices, one wealth management office, and one drive-through only facility, as well as 13 ATM locations in the Virginia communities of Berryville, Winchester, Boyce, Stephens City, Purcellville, Warrenton, Leesburg, Ashburn, and Fairfax. Eagle Financial Services, Inc. was founded in 1881 and is headquartered in Berryville, Virginia.