German American Bancorp (NASDAQ:GABC) and Enterprise Financial Services (NASDAQ:EFSC) Head to Head Comparison

German American Bancorp (NASDAQ:GABC) and Enterprise Financial Services (NASDAQ:EFSC) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, valuation, analyst recommendations, risk, institutional ownership and dividends.

Valuation and Earnings

This table compares German American Bancorp and Enterprise Financial Services’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
German American Bancorp $221.98 million 4.92 $59.22 million $2.35 17.50
Enterprise Financial Services $354.31 million 4.39 $92.74 million $4.08 12.19

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

Analyst Ratings

This is a summary of recent ratings and price targets for German American Bancorp and Enterprise Financial Services, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
German American Bancorp 0 1 0 0 2.00
Enterprise Financial Services 0 0 1 0 3.00

German American Bancorp currently has a consensus target price of $29.00, indicating a potential downside of 29.49%. Enterprise Financial Services has a consensus target price of $40.00, indicating a potential downside of 19.58%. Given Enterprise Financial Services’ stronger consensus rating and higher probable upside, analysts plainly believe Enterprise Financial Services is more favorable than German American Bancorp.

Dividends

German American Bancorp pays an annual dividend of $0.84 per share and has a dividend yield of 2.0%. Enterprise Financial Services pays an annual dividend of $0.72 per share and has a dividend yield of 1.4%. German American Bancorp pays out 35.7% of its earnings in the form of a dividend. Enterprise Financial Services pays out 17.6% 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 raised its dividend for 1 consecutive years and Enterprise Financial Services has raised its dividend for 1 consecutive years.

Profitability

This table compares German American Bancorp and Enterprise Financial Services’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
German American Bancorp 25.10% 9.72% 1.24%
Enterprise Financial Services 21.40% 8.61% 0.94%

Institutional and Insider Ownership

42.0% of German American Bancorp shares are held by institutional investors. Comparatively, 71.4% of Enterprise Financial Services shares are held by institutional investors. 7.8% of German American Bancorp shares are held by company insiders. Comparatively, 9.0% of Enterprise Financial Services shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Volatility & Risk

German American Bancorp has a beta of 0.76, indicating that its share price is 24% less volatile than the S&P 500. Comparatively, Enterprise Financial Services has a beta of 1.28, indicating that its share price is 28% more volatile than the S&P 500.

Summary

Enterprise Financial Services beats German American Bancorp on 10 of the 16 factors compared between the two stocks.

German American Bancorp Company Profile

German American Bancorp, Inc. operates as the bank 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 various deposit products 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 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. As of December 31, 2020, the company operated 73 banking offices in 20 contiguous southern Indiana counties; 8 counties in Kentucky; and one county in Tennessee. German American Bancorp, Inc. was founded in 1910 and is headquartered in Jasper, Indiana.

Enterprise Financial Services Company Profile

Enterprise Financial Services Corp operates as the financial holding company for Enterprise Bank & Trust that offers banking and wealth management services to individuals and corporate customers. The company offers checking, savings, and money market accounts, and certificates of deposit. It also provides commercial and industrial, commercial real estate, construction and land development, residential real estate, agricultural, and consumer loans. In addition, the company offers treasury management and international trade services; tax credit brokerage services consisting of the acquisition of tax credits and sale of these tax credits to clients; and financial and estate planning, investment management, and trust services to businesses, individuals, institutions, retirement plans, and non-profit organizations. Further, it offers fiduciary, financial advisory, and merchant processing services; and debit and credit cards. Additionally, the company provides international banking, internet and mobile banking, remote deposit capture, positive pay, fraud detection and prevention, automated payable, check imaging, and statement and document imaging services; and cash management products, controlled disbursements, repurchase agreements, and sweep investment accounts. As of December 31, 2020, it had 19 banking locations and three limited service facilities in the St. Louis metropolitan area; seven banking locations in the Kansas City metropolitan area; two banking locations in the Phoenix metropolitan area, six banking locations in New Mexico, four banking locations in the San Diego metropolitan area, and one banking location in the Las Vegas metropolitan area, as well as a network of SBA loan production offices and deposit production offices in various states. Enterprise Financial Services Corp was founded in 1988 and is headquartered in Clayton, Missouri.

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