Reviewing German American Bancorp (NASDAQ:GABC) and Solera National Bancorp (OTCMKTS:SLRK)

German American Bancorp (NASDAQ:GABC) and Solera National Bancorp (OTCMKTS:SLRK) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, risk, profitability, earnings, dividends, analyst recommendations and valuation.

Institutional & Insider Ownership

46.9% of German American Bancorp shares are held by institutional investors. 3.2% of German American Bancorp shares are held by insiders. Comparatively, 17.4% of Solera National Bancorp shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
German American Bancorp	27.09%	11.98%	1.62%
Solera National Bancorp	26.93%	N/A	N/A

Analyst Ratings

This is a breakdown of current ratings for German American Bancorp and Solera National Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
German American Bancorp	0	1	3	0	2.75
Solera National Bancorp	0	0	0	0	0.00

German American Bancorp currently has a consensus price target of $47.67, suggesting a potential upside of 9.03%. Given German American Bancorp’s stronger consensus rating and higher possible upside, research analysts clearly believe German American Bancorp is more favorable than Solera National Bancorp.

Valuation & Earnings

This table compares German American Bancorp and Solera National Bancorp”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
German American Bancorp	$376.11 million	4.37	$112.64 million	$3.61	12.11
Solera National Bancorp	$83.83 million	1.02	$23.02 million	$5.82	3.40

German American Bancorp has higher revenue and earnings than Solera National Bancorp. Solera National 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.

Risk & Volatility

German American Bancorp has a beta of 0.6, suggesting that its stock price is 40% less volatile than the S&P 500. Comparatively, Solera National Bancorp has a beta of 0.31, suggesting that its stock price is 69% less volatile than the S&P 500.

Summary

German American Bancorp beats Solera National Bancorp on 12 of the 14 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 Solera National Bancorp

Solera National Bancorp, Inc. operates as the bank holding company for Solera National Bank that provides commercial and consumer banking services in the United States. The company offers checking and savings accounts, money market accounts, time and demand deposits, and individual retirement accounts (IRA), as well as certificates of deposit; and real estate secured loans, construction loans, small business administration loans, business lines of credit, and equipment financing. It also provides online banking, account analysis, combined account analysis, commercial sweep, remote deposit, ACH origination, payroll direct deposit, merchant, business debit card, and cash management services. The company was incorporated in 2006 and is based in Lakewood, Colorado.