Reviewing Investors Bancorp (NASDAQ:ISBC) & Lakeland Financial (NASDAQ:LKFN)

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Investors Bancorp (NASDAQ:ISBC) and Lakeland Financial (NASDAQ:LKFN) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, risk, profitability, valuation, dividends, institutional ownership and analyst recommendations.

Insider and Institutional Ownership

74.0% of Investors Bancorp shares are owned by institutional investors. Comparatively, 73.5% of Lakeland Financial shares are owned by institutional investors. 3.5% of Investors Bancorp shares are owned by company insiders. Comparatively, 4.6% of Lakeland Financial shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

Investors Bancorp pays an annual dividend of $0.44 per share and has a dividend yield of 3.9%. Lakeland Financial pays an annual dividend of $1.20 per share and has a dividend yield of 2.6%. Investors Bancorp pays out 54.3% of its earnings in the form of a dividend. Lakeland Financial pays out 38.3% 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. Investors Bancorp has raised its dividend for 4 consecutive years and Lakeland Financial has raised its dividend for 7 consecutive years.

Profitability

This table compares Investors Bancorp and Lakeland Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Investors Bancorp 19.18% 7.30% 0.85%
Lakeland Financial 33.75% 16.34% 1.74%

Earnings and Valuation

This table compares Investors Bancorp and Lakeland Financial’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Investors Bancorp $978.50 million 3.20 $202.58 million $0.81 13.88
Lakeland Financial $239.08 million 4.93 $80.41 million $3.13 14.69

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

Volatility & Risk

Investors Bancorp has a beta of 0.94, indicating that its stock price is 6% less volatile than the S&P 500. Comparatively, Lakeland Financial has a beta of 0.95, indicating that its stock price is 5% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Investors Bancorp and Lakeland Financial, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Investors Bancorp 0 2 3 0 2.60
Lakeland Financial 0 2 0 0 2.00

Investors Bancorp presently has a consensus price target of $13.73, indicating a potential upside of 22.14%. Lakeland Financial has a consensus price target of $51.00, indicating a potential upside of 10.89%. Given Investors Bancorp’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Investors Bancorp is more favorable than Lakeland Financial.

Summary

Lakeland Financial beats Investors Bancorp on 10 of the 17 factors compared between the two stocks.

About Investors Bancorp

Investors Bancorp, Inc. operates as the holding company for Investors Bank that provides various banking products and services to individuals and businesses in the United States. Its deposit products include savings, checking, and money market accounts, as well as certificates of deposit. The company's loan portfolio comprises multi-family, commercial real estate, commercial and industrial, and construction loans; consumer and other loans primarily consisting of home equity loans, home equity lines of credit, and cash surrender value lending on life insurance contracts; and one-to four-family residential mortgage loans secured by one-to four-family residential real estate. As of December 11, 2018, it operated through a network of 151 branches in New Jersey and New York. The company was founded in 1926 and is headquartered in Short Hills, New Jersey.

About Lakeland Financial

Lakeland Financial Corporation operates as the bank holding company for Lake City Bank that provides various banking products and services. The company accepts various deposit products, such as noninterest bearing, interest-bearing checking, savings, money market, NOW, and demand deposits. Its loan products include commercial and industrial, commercial real estate and multi-family residential, agri-business and agricultural, consumer 1-4 family mortgage, and other consumer loans. The company also offers retail and merchant credit card services; corporate treasury management, wealth advisory, and trust services; retail brokerage services, including various financial and investment products, such as annuities and life insurance; and Internet business banking and online treasury management services. It serves commercial real estate, manufacturing, agriculture, construction, retail, wholesale, finance and insurance, accommodation and food services, and health care industries. As of January 25, 2019, the company operated 50 offices in Northern and Central Indiana. Lakeland Financial Corporation was founded in 1872 and is headquartered in Warsaw, Indiana.

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