Isabella Bank (NASDAQ:ISBA) & Bar Harbor Bankshares (NYSE:BHB) Critical Comparison

Isabella Bank (NASDAQ:ISBA) and Bar Harbor Bankshares (NYSE:BHB) are both small-cap financial services companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, valuation, analyst recommendations and dividends.

Profitability

This table compares Isabella Bank and Bar Harbor Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Isabella Bank	15.18%	7.83%	0.80%
Bar Harbor Bankshares	N/A	N/A	N/A

Analyst Recommendations

This is a summary of current recommendations and price targets for Isabella Bank and Bar Harbor Bankshares, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Isabella Bank	0	1	1	0	2.50
Bar Harbor Bankshares	0	0	1	0	3.00

Isabella Bank currently has a consensus price target of $34.00, suggesting a potential downside of 4.87%. Bar Harbor Bankshares has a consensus price target of $35.00, suggesting a potential upside of 14.64%. Given Bar Harbor Bankshares’ stronger consensus rating and higher possible upside, analysts clearly believe Bar Harbor Bankshares is more favorable than Isabella Bank.

Dividends

Isabella Bank pays an annual dividend of $1.12 per share and has a dividend yield of 3.1%. Bar Harbor Bankshares pays an annual dividend of $1.28 per share and has a dividend yield of 4.2%. Isabella Bank pays out 51.1% of its earnings in the form of a dividend. Bar Harbor Bankshares pays out 49.6% 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. Bar Harbor Bankshares has increased its dividend for 22 consecutive years. Bar Harbor Bankshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares Isabella Bank and Bar Harbor Bankshares”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Isabella Bank	$104.55 million	2.52	$13.89 million	$2.19	16.32
Bar Harbor Bankshares	$147.73 million	3.45	$43.04 million	$2.58	11.83

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

Institutional and Insider Ownership

54.5% of Bar Harbor Bankshares shares are owned by institutional investors. 1.5% of Isabella Bank shares are owned by insiders. Comparatively, 2.6% of Bar Harbor Bankshares shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Risk & Volatility

Isabella Bank has a beta of 0.12, indicating that its stock price is 88% less volatile than the S&P 500. Comparatively, Bar Harbor Bankshares has a beta of 0.71, indicating that its stock price is 29% less volatile than the S&P 500.

Summary

Bar Harbor Bankshares beats Isabella Bank on 12 of the 16 factors compared between the two stocks.

About Isabella Bank

Isabella Bank Corporation operates as the bank holding company for Isabella Bank that provides various banking products and services to businesses, institutions, and individuals and their families. Its deposit products include checking accounts, savings accounts, certificates of deposit, direct deposits, and money market accounts. The company’s loan portfolio comprises commercial, agricultural, and residential real estate loans, as well as consumer loans, including secured and unsecured personal loans. It also offers cash management, mobile and internet banking, electronic bill pay, automated teller machines, trust and investment, estate planning, and safe deposit box rental services; and group life, health, accident, disability, and other insurance products, as well as other employee benefit programs. As of December 31, 2021, the company operated 30 banking offices in Clare, Gratiot, Isabella, Mecosta, Midland, Montcalm, and Saginaw counties. Isabella Bank Corporation was founded in 1903 and is headquartered in Mount Pleasant, Michigan.

About Bar Harbor Bankshares

Bar Harbor Bankshares operates as the holding company for Bar Harbor Bank & Trust that provides commercial, lending, retail, and wealth management banking services. It accepts various deposit products, including interest-bearing and non-interest-bearing demand accounts, savings accounts, time deposits, and money market deposit accounts, as well as certificates of deposit. The company also provides commercial real estate loans, such as multi-family, commercial construction and land development, and other commercial real estate classes; commercial and industrial loans, including loans to commercial and agricultural businesses, and tax exempt entities; residential real estate loans consists of mortgages for 1-4 family housing; and consumer loans comprises home equity loans, lines of credit, auto, and other installment lending. In addition, it provides life insurance, annuity, and retirement products, as well as financial planning services; and third-party investment and insurance services. Further, the company offers trust and estate administration, wealth advisory, and investment management services to individuals, businesses, not-for-profit organizations, and municipalities; and 401K plan, financial, estate and charitable planning, investment management, family office, municipal, and tax services. It operates 53 locations across Maine, New Hampshire, and Vermont. The company was founded in 1887 and is based in Bar Harbor, Maine.