Contrasting Swedbank (OTCMKTS:SWDBY) and German American Bancorp (NASDAQ:GABC)

German American Bancorp (NASDAQ:GABC) and Swedbank (OTCMKTS:SWDBY) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, profitability, dividends, earnings and risk.

Volatility & Risk

German American Bancorp has a beta of 0.61, indicating that its stock price is 39% less volatile than the S&P 500. Comparatively, Swedbank has a beta of 0.71, indicating that its stock price is 29% less volatile than the S&P 500.

Earnings & Valuation

This table compares German American Bancorp and Swedbank”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
German American Bancorp	$386.18 million	4.86	$112.64 million	$3.79	13.17
Swedbank	$11.08 billion	4.09	$3.35 billion	SEK 2.95	13.67

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

Dividends

German American Bancorp pays an annual dividend of $1.24 per share and has a dividend yield of 2.5%. Swedbank pays an annual dividend of SEK 1.47 per share and has a dividend yield of 3.6%. German American Bancorp pays out 32.7% of its earnings in the form of a dividend. Swedbank pays out 49.8% 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. German American Bancorp has increased its dividend for 13 consecutive years.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for German American Bancorp and Swedbank, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
German American Bancorp	0	2	2	1	2.80
Swedbank	2	2	2	0	2.00

German American Bancorp currently has a consensus target price of $53.33, indicating a potential upside of 6.82%. Given German American Bancorp’s stronger consensus rating and higher probable upside, equities analysts clearly believe German American Bancorp is more favorable than Swedbank.

Profitability

This table compares German American Bancorp and Swedbank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
German American Bancorp	28.25%	12.14%	1.69%
Swedbank	29.45%	14.84%	0.99%

Insider and Institutional Ownership

46.9% of German American Bancorp shares are held by institutional investors. 3.2% of German American Bancorp shares are held 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.

Summary

German American Bancorp beats Swedbank on 10 of the 17 factors compared between the two stocks.

About German American Bancorp

German American Bancorp, Inc. operates as a financial holding company for German American Bank that provides retail and commercial banking services. The company operates through three segments: Core Banking, Wealth Management Services, and Insurance Operations. The Core Banking segment accepts deposits from the general public; and originates consumer, commercial and agricultural, commercial and agricultural real estate, and residential mortgage loans, as well as sells residential mortgage loans in the secondary market. The Wealth Management segment provides trust, investment advisory, brokerage, and retirement planning services. The Insurance Operations segment offers a range of personal and corporate property and casualty insurance products. It also offers checking, saving, and individual retirement accounts; certificates of deposit; wire transfer; credit cards; home equity, mortgages, and small business; treasury management; and online and mobile banking, bill pay, digital wallet, mobile check deposit, credit score and report, money management, and estatements, as well as wealth advisory. German American Bancorp, Inc. was founded in 1910 and is based in Jasper, Indiana.

About Swedbank

Swedbank AB (publ) provides various banking products and services to private and corporate customers in Sweden, Estonia, Latvia, Lithuania, Norway, the United States, Finland, Denmark, Luxembourg, and China. The company operates through three business areas: Swedish Banking, Baltic Banking, and Corporates and Institutions. It offers savings accounts, mutual funds and insurance savings, pension savings, institutional asset management, and other savings and investment products; private residential lending, consumer financing, corporate lending, leasing, and other financing products, as well as trade finance and factoring services; and current accounts, cash handling, debit and credit cards, and card acquiring, as well as domestic, international, mobile, document, and other payment products. The company also provides equity trading, structured products, corporate finance, custody services, fixed income and currency trading, and other capital market products; and administrative services, treasury operations, real estate brokerage and management services, legal services, safe deposit boxes, and other services. In addition, it offers pension insurance and plan, life, endowment insurance, and personal insurance products; investment management, investment banking, and mortgage lending services; and transaction banking services comprising cash management, securities, account, and clearing and settlement services, as well as Internet and mobile banking services. The company was formerly known as ForeningsSparbanken AB and changed its name to Swedbank AB (publ) in September 2006. Swedbank AB (publ) was founded in 1820 and is headquartered in Sundbyberg, Sweden.