Financial Review: Hawthorn Bancshares (NASDAQ:HWBK) vs. Stock Yards Bancorp (NASDAQ:SYBT)

Stock Yards Bancorp (NASDAQ:SYBT) and Hawthorn Bancshares (NASDAQ:HWBK) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their analyst recommendations, earnings, risk, valuation, profitability, institutional ownership and dividends.

Profitability

This table compares Stock Yards Bancorp and Hawthorn Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Stock Yards Bancorp	25.41%	13.39%	1.55%
Hawthorn Bancshares	22.77%	15.15%	1.42%

Dividends

Stock Yards Bancorp pays an annual dividend of $1.32 per share and has a dividend yield of 1.7%. Hawthorn Bancshares pays an annual dividend of $0.84 per share and has a dividend yield of 2.2%. Stock Yards Bancorp pays out 26.3% of its earnings in the form of a dividend. Hawthorn Bancshares pays out 22.0% 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. Stock Yards Bancorp has increased its dividend for 15 consecutive years and Hawthorn Bancshares has increased its dividend for 5 consecutive years. Hawthorn Bancshares is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a summary of recent recommendations and price targets for Stock Yards Bancorp and Hawthorn Bancshares, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Stock Yards Bancorp	0	6	1	0	2.14
Hawthorn Bancshares	0	0	1	0	3.00

Stock Yards Bancorp currently has a consensus price target of $88.00, indicating a potential upside of 11.90%. Given Stock Yards Bancorp’s higher possible upside, equities research analysts plainly believe Stock Yards Bancorp is more favorable than Hawthorn Bancshares.

Insider and Institutional Ownership

56.5% of Stock Yards Bancorp shares are owned by institutional investors. Comparatively, 30.7% of Hawthorn Bancshares shares are owned by institutional investors. 2.9% of Stock Yards Bancorp shares are owned by company insiders. Comparatively, 22.9% of Hawthorn Bancshares shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Risk and Volatility

Stock Yards Bancorp has a beta of 0.74, suggesting that its share price is 26% less volatile than the S&P 500. Comparatively, Hawthorn Bancshares has a beta of 0.47, suggesting that its share price is 53% less volatile than the S&P 500.

Valuation & Earnings

This table compares Stock Yards Bancorp and Hawthorn Bancshares”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Stock Yards Bancorp	$564.54 million	4.33	$140.15 million	$5.02	15.67
Hawthorn Bancshares	$111.97 million	2.38	$23.80 million	$3.82	10.11

Stock Yards Bancorp has higher revenue and earnings than Hawthorn Bancshares. Hawthorn Bancshares is trading at a lower price-to-earnings ratio than Stock Yards Bancorp, indicating that it is currently the more affordable of the two stocks.

Summary

Stock Yards Bancorp beats Hawthorn Bancshares on 11 of the 16 factors compared between the two stocks.

About Stock Yards Bancorp

Stock Yards Bancorp, Inc. operates as a holding company for Stock Yards Bank & Trust Company that provides various financial services for individuals, corporations, and others in the United States. It operates in two segments, Commercial Banking, and WM&T. The Commercial Banking segment offers a range of loan and deposit products to individual consumers and businesses in all its markets through retail lending, mortgage banking, deposit services, online banking, mobile banking, private banking, commercial lending, commercial real estate lending, leasing, treasury management services, merchant services, international banking, correspondent banking, and other banking services. This segment also provides securities brokerage services through an arrangement with a third party broker-dealer. The WM&T segment provides investment management, financial and retirement planning, and trust and estate services, as well as retirement plan management for businesses and corporations. It provides services in Louisville, central, eastern, and northern Kentucky, as well as Indianapolis, Indiana and Cincinnati, Ohio metropolitan markets. The company was founded in 1904 and is headquartered in Louisville, Kentucky.

About Hawthorn Bancshares

Hawthorn Bancshares, Inc. operates as the bank holding company for Hawthorn Bank that provides various banking services in the United States. It accepts checking, savings, money market, individual retirement, and other time deposit accounts, as well as certificates of deposit. The company also offers commercial and industrial, single payment personal, installment, commercial and residential real estate, and consumer loans, as well as equipment, operating, and small business administration loans; and debit and credit cards. In addition, it provides trust services that include estate planning, investment, and asset management services; and cash management, safety deposit box, brokerage, and Internet banking services. Hawthorn Bancshares, Inc. was founded in 1865 and is headquartered in Jefferson City, Missouri.