Hanover Bancorp (NASDAQ:HNVR – Get Free Report) and German American Bancorp (NASDAQ:GABC – Get Free Report) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, earnings, institutional ownership, dividends, risk, profitability and valuation.
Volatility & Risk
Hanover Bancorp has a beta of -0.14, meaning that its stock price is 114% less volatile than the S&P 500. Comparatively, German American Bancorp has a beta of 0.62, meaning that its stock price is 38% less volatile than the S&P 500.
Profitability
This table compares Hanover Bancorp and German American Bancorp’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Hanover Bancorp | 10.82% | 7.69% | 0.65% |
| German American Bancorp | 27.10% | 14.26% | 1.42% |
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Hanover Bancorp | 0 | 0 | 1 | 0 | 3.00 |
| German American Bancorp | 0 | 1 | 1 | 0 | 2.50 |
Hanover Bancorp currently has a consensus price target of $21.00, suggesting a potential upside of 39.53%. German American Bancorp has a consensus price target of $37.50, suggesting a potential upside of 17.63%. Given Hanover Bancorp’s stronger consensus rating and higher possible upside, research analysts plainly believe Hanover Bancorp is more favorable than German American Bancorp.
Dividends
Hanover Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 2.7%. German American Bancorp pays an annual dividend of $1.08 per share and has a dividend yield of 3.4%. Hanover Bancorp pays out 20.4% of its earnings in the form of a dividend. German American Bancorp pays out 37.0% 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 12 consecutive years. German American Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation & Earnings
This table compares Hanover Bancorp and German American Bancorp’s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Hanover Bancorp | $113.89 million | 0.96 | $15.16 million | $1.96 | 7.68 |
| German American Bancorp | $316.92 million | 2.98 | $85.89 million | $2.92 | 10.92 |
German American Bancorp has higher revenue and earnings than Hanover Bancorp. Hanover Bancorp 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.
Insider and Institutional Ownership
15.0% of Hanover Bancorp shares are held by institutional investors. Comparatively, 46.9% of German American Bancorp shares are held by institutional investors. 24.8% of Hanover Bancorp shares are held by insiders. Comparatively, 6.2% of German American Bancorp shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Summary
German American Bancorp beats Hanover Bancorp on 12 of the 16 factors compared between the two stocks.
About Hanover Bancorp
Hanover Bancorp, Inc., a bank holding company for Hanover Community Bank, provides personal and business lending and deposit services to businesses, municipalities, and individuals in the New York metro area. The company offers checking, credit cards, debit cards, money market, savings, government and municipal banking, and professional services, as well as time deposits, including certificate of deposit and individual retirement accounts. It also provides business loans, commercial real estate financing, small business administration, lending directory services, and residential mortgage. In addition, the company offers cash management, online and mobile banking, merchant services, and digital solutions. Its banking offices are located in Nassau, Suffolk, Queens, Kings, New York Counties, New York, Monmouth County, Freehold, and New Jersey. The company was founded in 2008 and is headquartered in Mineola, New York.
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.
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