Horizon Bancorp (NASDAQ:HBNC) and Bank of Commerce (NASDAQ:BOCH) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, earnings, profitability, valuation, analyst recommendations, institutional ownership and risk.
Horizon Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 2.2%. Bank of Commerce pays an annual dividend of $0.16 per share and has a dividend yield of 1.4%. Horizon Bancorp pays out 39.2% of its earnings in the form of a dividend. Bank of Commerce pays out 25.0% 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. Horizon Bancorp has increased its dividend for 4 consecutive years. Horizon Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a summary of recent ratings and recommmendations for Horizon Bancorp and Bank of Commerce, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Bank of Commerce||0||1||0||0||2.00|
Horizon Bancorp currently has a consensus target price of $22.33, suggesting a potential upside of 24.56%. Bank of Commerce has a consensus target price of $13.50, suggesting a potential upside of 17.39%. Given Horizon Bancorp’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Horizon Bancorp is more favorable than Bank of Commerce.
This table compares Horizon Bancorp and Bank of Commerce’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Bank of Commerce||18.19%||9.54%||0.97%|
Risk and Volatility
Horizon Bancorp has a beta of 0.9, suggesting that its share price is 10% less volatile than the S&P 500. Comparatively, Bank of Commerce has a beta of 0.38, suggesting that its share price is 62% less volatile than the S&P 500.
Valuation and Earnings
This table compares Horizon Bancorp and Bank of Commerce’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Horizon Bancorp||$161.62 million||4.26||$33.11 million||$1.02||17.58|
|Bank of Commerce||$50.77 million||3.70||$7.34 million||$0.64||17.97|
Horizon Bancorp has higher revenue and earnings than Bank of Commerce. Horizon Bancorp is trading at a lower price-to-earnings ratio than Bank of Commerce, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
52.6% of Horizon Bancorp shares are owned by institutional investors. Comparatively, 56.0% of Bank of Commerce shares are owned by institutional investors. 4.6% of Horizon Bancorp shares are owned by company insiders. Comparatively, 6.4% of Bank of Commerce shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Horizon Bancorp beats Bank of Commerce on 14 of the 17 factors compared between the two stocks.
Horizon Bancorp Company Profile
Horizon Bancorp, Inc. operates as the bank holding company for Horizon Bank that provides commercial and retail banking services. The company offers non-interest bearing and interest-bearing demand deposits, savings accounts, money market deposits, and time deposits. Its loan portfolio comprises commercial, financial, agricultural, and commercial tax-exempt loans; and real estate, mortgage warehouse, and consumer loans. The company also provides corporate and individual trust and agency, investment management, and real estate investment trust services; and sells various insurance products. It operates through a network of 62 full service offices in Northern and Central Indiana, as well as Southern, Central, and Great Lakes bay regions of Michigan. The company was founded in 1873 and is headquartered in Michigan City, Indiana.
Bank of Commerce Company Profile
Bank of Commerce Holdings operates as the bank holding company for Redding Bank of Commerce that provides a range of financial services and products for retail customers and small to medium sized businesses in California. The company's deposit products include checking, interest-bearing checking, money market, and savings accounts, as well as certificates of deposit. The company also offers commercial loans, commercial real estate loans, residential mortgages, consumer loans, construction loans, term loans, small business administration loans, and home equity loans. In addition, it provides sweep arrangements, safe deposit boxes, collection services, electronic banking services, payroll processing, and ATM and point of sale services. As of January 19, 2018, the company operated nine offices located in northern California. Bank of Commerce Holdings is headquartered in Sacramento, California.
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