Reviewing Independent Bank (INDB) & Hancock (HBHC)

Hancock (NASDAQ: HBHC) and Independent Bank (NASDAQ:INDB) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, risk, valuation, profitability, analyst recommendations, institutional ownership and dividends.

Profitability

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

Net Margins Return on Equity Return on Assets
Hancock 18.46% 8.96% 0.96%
Independent Bank 24.21% 10.00% 1.15%

Analyst Recommendations

This is a breakdown of current ratings and target prices for Hancock and Independent Bank, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hancock 0 3 4 1 2.75
Independent Bank 0 3 1 0 2.25

Hancock presently has a consensus target price of $56.86, suggesting a potential upside of 6.67%. Independent Bank has a consensus target price of $70.67, suggesting a potential downside of 1.10%. Given Hancock’s stronger consensus rating and higher possible upside, research analysts plainly believe Hancock is more favorable than Independent Bank.

Earnings & Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hancock $1.17 billion 3.89 $215.63 million $2.49 21.41
Independent Bank $360.19 million 5.44 $87.20 million $3.18 22.47

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

Institutional and Insider Ownership

76.8% of Hancock shares are held by institutional investors. Comparatively, 79.7% of Independent Bank shares are held by institutional investors. 1.2% of Hancock shares are held by company insiders. Comparatively, 2.7% of Independent Bank shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Risk and Volatility

Hancock has a beta of 1.02, suggesting that its stock price is 2% more volatile than the S&P 500. Comparatively, Independent Bank has a beta of 0.91, suggesting that its stock price is 9% less volatile than the S&P 500.

Dividends

Hancock pays an annual dividend of $0.96 per share and has a dividend yield of 1.8%. Independent Bank pays an annual dividend of $1.28 per share and has a dividend yield of 1.8%. Hancock pays out 38.6% of its earnings in the form of a dividend. Independent Bank pays out 40.3% 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. Hancock is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Hancock beats Independent Bank on 10 of the 17 factors compared between the two stocks.

About Hancock

Hancock Holding Company is a financial services company that provides a network of service financial choices to the Gulf South region, through its bank subsidiary, Whitney Bank (the Bank), a Mississippi state bank. The Company operates through overall banking operations segment. The Bank operates under brands, such as Hancock Bank in Mississippi, Alabama and Florida, and Whitney Bank in Louisiana and Texas. The Bank operates across the Gulf South region, which consists of southern Mississippi; southern and central Alabama; southern Louisiana; the northern, central, and panhandle regions of Florida; Houston, Texas, and Nashville, Tennessee. The Bank offers a range of traditional and online community banking services to commercial, small business and retail customers, providing a range of transaction and savings deposit products, treasury management services and investment brokerage services, among others.

About Independent Bank

Independent Bank Corp. is a bank holding company. The Company operates through its subsidiary, Rockland Trust Company (the Bank). The Bank is a community-oriented commercial bank. Its community banking business provides a range of banking services, including lending activities, acceptance of demand, savings, and time deposits, and investment management. As of December 31, 2016, the bank had operated 80 full service and three limited service retail branches, 11 commercial banking centers, five investment management offices and one mortgage lending center, all of which located in Eastern Massachusetts. The Bank classifies loans as commercial loans, consumer real estate loans, or other consumer loans. Commercial loans consist of commercial and industrial loans, commercial real estate loans, commercial construction loans, and small business loans. The Bank offers a range of demand deposits, interest checking, money market accounts, savings accounts and time certificates of deposit.

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