Head to Head Survey: Peoples Bancorp (NASDAQ:PEBO) and Independent Bank (NASDAQ:IBCP)

Independent Bank (NASDAQ:IBCP) and Peoples Bancorp (NASDAQ:PEBO) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, profitability, dividends, analyst recommendations, institutional ownership, earnings and risk.

Profitability

This table compares Independent Bank and Peoples Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Independent Bank	21.25%	14.76%	1.28%
Peoples Bancorp	16.57%	9.45%	1.15%

Insider & Institutional Ownership

79.4% of Independent Bank shares are owned by institutional investors. Comparatively, 60.7% of Peoples Bancorp shares are owned by institutional investors. 5.7% of Independent Bank shares are owned by company insiders. Comparatively, 3.4% of Peoples Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Independent Bank and Peoples Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Independent Bank	0	4	0	0	2.00
Peoples Bancorp	0	4	2	0	2.33

Independent Bank currently has a consensus target price of $36.00, indicating a potential upside of 18.62%. Peoples Bancorp has a consensus target price of $33.13, indicating a potential upside of 16.35%. Given Independent Bank’s higher probable upside, analysts clearly believe Independent Bank is more favorable than Peoples Bancorp.

Valuation & Earnings

This table compares Independent Bank and Peoples Bancorp”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Independent Bank	$222.04 million	2.83	$66.79 million	$3.26	9.31
Peoples Bancorp	$447.86 million	2.27	$117.21 million	$2.86	9.95

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

Volatility & Risk

Independent Bank has a beta of 0.86, indicating that its share price is 14% less volatile than the S&P 500. Comparatively, Peoples Bancorp has a beta of 0.7, indicating that its share price is 30% less volatile than the S&P 500.

Dividends

Independent Bank pays an annual dividend of $1.04 per share and has a dividend yield of 3.4%. Peoples Bancorp pays an annual dividend of $1.64 per share and has a dividend yield of 5.8%. Independent Bank pays out 31.9% of its earnings in the form of a dividend. Peoples Bancorp pays out 57.3% 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. Independent Bank has raised its dividend for 11 consecutive years and Peoples Bancorp has raised its dividend for 10 consecutive years.

Summary

Independent Bank beats Peoples Bancorp on 11 of the 17 factors compared between the two stocks.

About Independent Bank

Independent Bank Corporation operates as the bank holding company for Independent Bank that provides commercial banking services to individuals and businesses in rural and suburban communities in Michigan. It offers checking and savings accounts, commercial lending, direct and indirect consumer financing, mortgage lending, and safe deposit box services. The company also provides title insurance services and investment services, as well as automatic teller machines, and internet and mobile banking services. In addition, it operates through branches, drive-thru facilities, and loan production offices. Independent Bank Corporation was founded in 1864 and is based in Grand Rapids, Michigan.

About Peoples Bancorp

Peoples Bancorp Inc. operates as the holding company for Peoples Bank that provides commercial and consumer banking products and services. The company accepts various deposit products, including demand deposit accounts, savings accounts, money market accounts, certificates of deposit, and governmental deposits; and provides commercial and industrial, commercial real estate, construction, finance, residential real estate, and consumer indirect and direct loans, as well as home equity lines of credit and overdrafts. It also offers debit and automated teller machine (ATM) cards; safe deposit rental facilities; money orders and cashier’s checks; and telephone, mobile, and online banking services. In addition, the company provides various life, health, and property and casualty insurance products; third-party insurance administration; interactive teller machines; insurance premium financing; check deposit and alert notification; commercial and technology equipment leasing; fiduciary and trust; underwriting, origination, and servicing of equipment leases, and equipment financing agreements; and asset management and administration services, as well as employee benefit, retirement, and health care plan administration services. Further, it offers brokerage services through an unaffiliated registered broker-dealers; insurance premium finance lending and leasing; and credit cards to individuals and businesses, as well as provides merchant credit card transaction processing, and person-to-person payment processing services. Peoples Bancorp Inc. was founded in 1902 and is headquartered in Marietta, Ohio.