Associated Banc (NYSE:ASB) vs. Independent Bank (NYSE:INDB) Head to Head Analysis

Associated Banc (NYSE:ASB) and Independent Bank (NASDAQ:INDB) are both mid-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, valuation, profitability, analyst recommendations, institutional ownership, risk and dividends.

Profitability

This table compares Associated Banc and Independent Bank’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Associated Banc 22.01% 9.86% 1.05%
Independent Bank 26.75% 12.99% 1.65%

Analyst Recommendations

This is a summary of current recommendations for Associated Banc and Independent Bank, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Associated Banc 2 6 2 0 2.00
Independent Bank 0 1 2 0 2.67

Associated Banc currently has a consensus price target of $24.44, indicating a potential upside of 20.89%. Independent Bank has a consensus price target of $82.00, indicating a potential upside of 9.14%. Given Associated Banc’s higher possible upside, research analysts clearly believe Associated Banc is more favorable than Independent Bank.

Volatility & Risk

Associated Banc has a beta of 1.2, suggesting that its stock price is 20% more volatile than the S&P 500. Comparatively, Independent Bank has a beta of 1.19, suggesting that its stock price is 19% more volatile than the S&P 500.

Insider & Institutional Ownership

73.2% of Associated Banc shares are held by institutional investors. Comparatively, 78.3% of Independent Bank shares are held by institutional investors. 2.7% of Associated Banc shares are held by company insiders. Comparatively, 1.6% of Independent Bank shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Dividends

Associated Banc pays an annual dividend of $0.68 per share and has a dividend yield of 3.4%. Independent Bank pays an annual dividend of $1.76 per share and has a dividend yield of 2.3%. Associated Banc pays out 33.5% of its earnings in the form of a dividend. Independent Bank pays out 37.5% 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. Associated Banc has increased its dividend for 3 consecutive years and Independent Bank has increased its dividend for 8 consecutive years. Associated Banc is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares Associated Banc and Independent Bank’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Associated Banc $1.51 billion 2.17 $333.56 million $2.03 9.96
Independent Bank $412.21 million 6.26 $121.62 million $4.69 16.02

Associated Banc has higher revenue and earnings than Independent Bank. Associated Banc is trading at a lower price-to-earnings ratio than Independent Bank, indicating that it is currently the more affordable of the two stocks.

Summary

Independent Bank beats Associated Banc on 9 of the 16 factors compared between the two stocks.

Associated Banc Company Profile

Associated Banc-Corp, a bank holding company, provides various banking and nonbanking products to individuals and businesses in Wisconsin, Illinois, and Minnesota. Its Corporate and Commercial Specialty segment offers deposit and cash management solutions, such as commercial checking and interest-bearing deposit products, cash vault and night depository services, liquidity solutions, payables and receivables solutions, and information services; and lending solutions, including commercial loans and lines of credit, commercial real estate financing, construction loans, letters of credit, leasing, asset based lending, and loan syndications. This segment also provides specialized financial services comprising interest rate risk management, foreign exchange solutions, and commodity hedging. The company's Community, Consumer, and Business segment offers checking, credit, debit and pre-paid cards, online banking and bill pay, and money transfer services; residential mortgages, home equity loans and lines of credit, personal and installment loans, real estate financing, business loans, and business lines of credit; savings, money market deposit accounts, IRA accounts, certificates of deposit, and fixed and variable annuities, as well as full-service, discount, and online investment brokerage; investment advisory services; trust and investment management accounts; and insurance and other related products and services. This segment also engages in the administration of pension, profit-sharing and other employee benefit plans, fiduciary and corporate agency services, and institutional asset management services. Its Risk Management and Shared Services segment provides corporate risk management, credit administration, finance, treasury, operations, and technology services. As of April 30, 2019, the company operated approximately 230 banking locations serving approximately 110 communities. Associated Banc-Corp was founded in 1861 and is headquartered in Green Bay, Wisconsin.

Independent Bank Company Profile

Independent Bank Corp. operates as the bank holding company for Rockland Trust Company that provides commercial banking products and services to individuals and small-to-medium sized businesses primarily in Massachusetts. Its products and services include demand deposits and time certificates of deposit, as well as checking, money market, and savings accounts. The company's loan portfolio includes commercial loans, such as commercial and industrial, asset-based, commercial real estate, commercial construction, and small business loans; consumer real estate loans, including residential mortgages, home equity loans, and loans for the construction of residential properties; and other consumer loans, such as personal loans. Its commercial and industrial loans cover loans for working capital, other business-related purposes, and floor plan financing; asset-based loans consist primarily of revolving lines of credit and term loans; commercial real estate loans include commercial mortgages for construction purposes that are secured by nonresidential properties, multifamily properties, or one-to-four family rental properties; and small business loans comprise businesses with commercial credit needs. The company also provides investment management and trust services to individuals, institutions, small businesses, and charitable institutions; Internet and mobile banking services, as well as automated teller machine cards and debit cards; and mutual fund shares, unit investment trust shares, general securities, fixed and variable annuities, and life insurance. It operates through 87 full service and 2 limited service retail branches, 13 commercial banking centers, 8 investment management offices, and 1 mortgage lending center in Eastern Massachusetts; and an investment management group/commercial lending office in Rhode Island. The company was founded in 1907 and is headquartered in Rockland, Massachusetts.

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