Contrasting Southern Missouri Bancorp (NASDAQ:SMBC) and Independent Bank (NASDAQ:IBCP)

Southern Missouri Bancorp (NASDAQ:SMBC) and Independent Bank (NASDAQ:IBCP) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, profitability, earnings, analyst recommendations, valuation, institutional ownership and risk.

Risk & Volatility

Southern Missouri Bancorp has a beta of 0.87, meaning that its share price is 13% less volatile than the S&P 500. Comparatively, Independent Bank has a beta of 0.73, meaning that its share price is 27% less volatile than the S&P 500.

Earnings & Valuation

This table compares Southern Missouri Bancorp and Independent Bank”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Southern Missouri Bancorp	$316.78 million	2.50	$71.84 million	$6.43	11.19
Independent Bank	$315.38 million	2.53	$68.54 million	$3.44	10.43

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Southern Missouri Bancorp	22.63%	12.59%	1.41%
Independent Bank	22.32%	14.12%	1.29%

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Southern Missouri Bancorp and Independent Bank, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Southern Missouri Bancorp	0	5	1	1	2.43
Independent Bank	0	2	3	0	2.60

Southern Missouri Bancorp presently has a consensus price target of $81.75, suggesting a potential upside of 13.61%. Independent Bank has a consensus price target of $39.50, suggesting a potential upside of 10.06%. Given Southern Missouri Bancorp’s higher probable upside, research analysts plainly believe Southern Missouri Bancorp is more favorable than Independent Bank.

Dividends

Southern Missouri Bancorp pays an annual dividend of $1.08 per share and has a dividend yield of 1.5%. Independent Bank pays an annual dividend of $1.12 per share and has a dividend yield of 3.1%. Southern Missouri Bancorp pays out 16.8% of its earnings in the form of a dividend. Independent Bank pays out 32.6% 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. Southern Missouri Bancorp has increased its dividend for 13 consecutive years and Independent Bank has increased its dividend for 11 consecutive years.

Insider and Institutional Ownership

49.5% of Southern Missouri Bancorp shares are held by institutional investors. Comparatively, 79.4% of Independent Bank shares are held by institutional investors. 14.6% of Southern Missouri Bancorp shares are held by insiders. Comparatively, 5.9% of Independent Bank shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Southern Missouri Bancorp beats Independent Bank on 12 of the 18 factors compared between the two stocks.

About Southern Missouri Bancorp

Southern Missouri Bancorp, Inc. operates as the bank holding company for Southern Bank that provides banking and financial services to individuals and corporate customers in the United States. The company offers deposits products, including interest-bearing and noninterest-bearing transaction accounts, saving accounts, certificates of deposit, retirement savings plans, and money market deposit accounts. It also provides loans, such as residential mortgage, commercial real estate, construction, and commercial business loans; and consumer loans comprising home equity, direct and indirect automobile loans, second mortgages, mobile home loans, and loans secured by deposits. In addition, the company offers fiduciary and investment management services; commercial and consumer insurance; online and mobile banking services; and debit or credit cards. The company was founded in 1887 and is headquartered in Poplar Bluff, Missouri.

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.