Analyzing Avidbank (NASDAQ:AVBH) and Horizon Bancorp (IN) (NASDAQ:HBNC)

Avidbank (NASDAQ:AVBH) and Horizon Bancorp (IN) (NASDAQ:HBNC) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, valuation, risk, institutional ownership, analyst recommendations, earnings and profitability.

Profitability

This table compares Avidbank and Horizon Bancorp (IN)’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Avidbank	-8.69%	10.85%	1.21%
Horizon Bancorp (IN)	-36.38%	13.31%	1.40%

Institutional and Insider Ownership

15.9% of Avidbank shares are owned by institutional investors. Comparatively, 64.5% of Horizon Bancorp (IN) shares are owned by institutional investors. 9.6% of Avidbank shares are owned by company insiders. Comparatively, 1.2% of Horizon Bancorp (IN) shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility & Risk

Avidbank has a beta of 0.33, indicating that its share price is 67% less volatile than the S&P 500. Comparatively, Horizon Bancorp (IN) has a beta of 0.81, indicating that its share price is 19% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings for Avidbank and Horizon Bancorp (IN), as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Avidbank	0	1	3	0	2.75
Horizon Bancorp (IN)	0	3	2	0	2.40

Avidbank currently has a consensus price target of $35.33, suggesting a potential upside of 13.54%. Horizon Bancorp (IN) has a consensus price target of $22.33, suggesting a potential upside of 17.42%. Given Horizon Bancorp (IN)’s higher possible upside, analysts clearly believe Horizon Bancorp (IN) is more favorable than Avidbank.

Earnings & Valuation

This table compares Avidbank and Horizon Bancorp (IN)”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Avidbank	$151.76 million	2.25	-$19.55 million	($1.92)	-16.21
Horizon Bancorp (IN)	$405.46 million	2.41	-$150.48 million	($3.16)	-6.02

Avidbank has higher earnings, but lower revenue than Horizon Bancorp (IN). Avidbank is trading at a lower price-to-earnings ratio than Horizon Bancorp (IN), indicating that it is currently the more affordable of the two stocks.

Summary

Horizon Bancorp (IN) beats Avidbank on 8 of the 14 factors compared between the two stocks.

About Avidbank

Avidbank Holdings, Inc. operates as a bank holding company for Avidbank that provides financial products and services to small and middle-market businesses, professionals, and individuals in the Santa Clara, San Mateo, and San Francisco counties. It offers business and personal deposit products, such as checking, money market, and savings accounts; and certificates of deposit. The company also provides personal lending products include secured and unsecured lines of credit, home equity lines of credit, remodel and new home construction loans, and term loans; corporate banking comprises working capital lines of credit, equipment loans, acquisition financing, shareholder buyouts, ESOP loans, and owner-occupied real estate loans; and commercial real estate lending, such as permanent loans and bridge financing products. In addition, it offers construction lending products, including land acquisition loans, pre-development loans, construction spec SFD, owner-occupied SFD, condominiums, subdivision, unsecured business lines, real estate bridge loans, and RLOC – real estate secured loans. Further, the company provides various financing solutions, such as structured finance, venture lending, asset-based lending, and sponsor finance. Additionally, it offers various services, such as automated clearing house payments and collections, bill pay, wire transfer, lockbox, merchant, remote deposit capture, ATM/debit cards, credit cards, business courier, cash management, and notary services, as well as online and mobile banking. The company was formerly known as Peninsula Bank Holding Co. and changed its name to Avidbank Holdings, Inc. in August 2011. Avidbank Holdings, Inc. was founded in 2003 and is headquartered in San Jose, California.

About Horizon Bancorp (IN)

Horizon Bancorp, Inc. operates as the bank holding company for Horizon Bank that engages in the provision of commercial and retail banking services. The company offers checking, saving, money market, certificate of deposits, individual retirement accounts, and time deposits, as well as non-interest- and interest-bearing demand deposits. It also provides commercial, residential real estate, mortgage, home equity, auto, personal, business, agricultural, and SBA loans, as well as credit cards. In addition, the company offers corporate and individual trust and agency, investment management, and real estate investment trust services; debit cards; treasury management; online and mobile banking; wealth, retirement, and estate and trust services; and sells various insurance products. It operates through full-service offices in northern and central Indiana and southern and central Michigan. Horizon Bancorp, Inc. was founded in 1873 and is headquartered in Michigan City, Indiana.