Head to Head Comparison: Lakeland Financial (NASDAQ:LKFN) vs. German American Bancorp (NASDAQ:GABC)

Lakeland Financial (NASDAQ:LKFN) and German American Bancorp (NASDAQ:GABC) are both small-cap 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.

Volatility & Risk

Lakeland Financial has a beta of 0.73, indicating that its stock price is 27% less volatile than the S&P 500. Comparatively, German American Bancorp has a beta of 0.59, indicating that its stock price is 41% less volatile than the S&P 500.

Insider and Institutional Ownership

81.2% of Lakeland Financial shares are owned by institutional investors. Comparatively, 46.9% of German American Bancorp shares are owned by institutional investors. 3.0% of Lakeland Financial shares are owned by company insiders. Comparatively, 3.2% of German American Bancorp 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Lakeland Financial	25.81%	14.79%	1.57%
German American Bancorp	27.09%	11.98%	1.62%

Dividends

Lakeland Financial pays an annual dividend of $2.08 per share and has a dividend yield of 3.5%. German American Bancorp pays an annual dividend of $1.24 per share and has a dividend yield of 2.8%. Lakeland Financial pays out 48.7% of its earnings in the form of a dividend. German American Bancorp pays out 34.3% 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. Lakeland Financial has raised its dividend for 14 consecutive years and German American Bancorp has raised its dividend for 13 consecutive years. Lakeland Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lakeland Financial	0	3	1	0	2.25
German American Bancorp	0	1	3	0	2.75

Lakeland Financial presently has a consensus price target of $66.50, indicating a potential upside of 11.09%. German American Bancorp has a consensus price target of $47.67, indicating a potential upside of 5.95%. Given Lakeland Financial’s higher probable upside, equities research analysts plainly believe Lakeland Financial is more favorable than German American Bancorp.

Earnings & Valuation

This table compares Lakeland Financial and German American Bancorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lakeland Financial	$421.71 million	3.54	$103.36 million	$4.27	14.02
German American Bancorp	$376.11 million	4.49	$112.64 million	$3.61	12.46

German American Bancorp has lower revenue, but higher earnings than Lakeland Financial. German American 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.

Summary

Lakeland Financial beats German American Bancorp on 9 of the 17 factors compared between the two stocks.

About Lakeland Financial

Lakeland Financial Corporation operates as the bank holding company for Lake City Bank that provides various banking products and services in the United States. 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, construction, agri-business and agricultural, consumer 1-4 family mortgage, and other commercial and consumer loans. The company also provides 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 mobile business banking and on-line treasury management services. It serves commercial real estate, manufacturing, agriculture, construction, retail, wholesale, finance and insurance, accommodation and food services, and health care industries. The company was founded in 1872 and is headquartered in Warsaw, Indiana.

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.