Capital Bancorp (NASDAQ:CBNK) vs. Horizon Bancorp (IN) (NASDAQ:HBNC) Critical Contrast

Capital Bancorp (NASDAQ:CBNK) and Horizon Bancorp (IN) (NASDAQ:HBNC) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, earnings, dividends, institutional ownership, profitability, analyst recommendations and risk.

Profitability

This table compares Capital Bancorp and Horizon Bancorp (IN)’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Capital Bancorp	17.48%	13.48%	1.51%
Horizon Bancorp (IN)	-37.28%	12.41%	1.29%

Institutional and Insider Ownership

56.1% of Capital Bancorp shares are held by institutional investors. Comparatively, 64.5% of Horizon Bancorp (IN) shares are held by institutional investors. 33.5% of Capital Bancorp shares are held by company insiders. Comparatively, 1.2% of Horizon Bancorp (IN) shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Capital Bancorp pays an annual dividend of $0.48 per share and has a dividend yield of 1.6%. Horizon Bancorp (IN) pays an annual dividend of $0.64 per share and has a dividend yield of 3.6%. Capital Bancorp pays out 14.5% of its earnings in the form of a dividend. Horizon Bancorp (IN) pays out -20.1% 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. Capital Bancorp has raised its dividend for 3 consecutive years. Horizon Bancorp (IN) is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk & Volatility

Capital Bancorp has a beta of 0.55, meaning that its stock price is 45% less volatile than the S&P 500. Comparatively, Horizon Bancorp (IN) has a beta of 0.83, meaning that its stock price is 17% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Capital Bancorp and Horizon Bancorp (IN), as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Capital Bancorp	0	2	3	0	2.60
Horizon Bancorp (IN)	0	3	2	0	2.40

Capital Bancorp presently has a consensus price target of $35.33, indicating a potential upside of 16.50%. Horizon Bancorp (IN) has a consensus price target of $20.67, indicating a potential upside of 15.59%. Given Capital Bancorp’s stronger consensus rating and higher possible upside, analysts plainly believe Capital Bancorp is more favorable than Horizon Bancorp (IN).

Valuation & Earnings

This table compares Capital Bancorp and Horizon Bancorp (IN)”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Capital Bancorp	$310.06 million	1.59	$57.17 million	$3.31	9.16
Horizon Bancorp (IN)	$405.46 million	2.26	-$150.48 million	($3.18)	-5.62

Capital Bancorp has higher earnings, but lower revenue than Horizon Bancorp (IN). Horizon Bancorp (IN) is trading at a lower price-to-earnings ratio than Capital Bancorp, indicating that it is currently the more affordable of the two stocks.

Summary

Capital Bancorp beats Horizon Bancorp (IN) on 11 of the 17 factors compared between the two stocks.

About Capital Bancorp

Capital Bancorp, Inc. operates as the bank holding company for Capital Bank, N.A. that provides various banking products and services to businesses, not-for-profit associations, and entrepreneurs in Maryland, Virginia, and the District of Columbia. It operates through Commercial Banking, Capital Bank Home Loans, and OpenSky segments. The company offers a range of deposit products, including checking and savings, time, interest bearing and noninterest-bearing demand, and money market accounts, as well as certificates of deposit; and credit cards. It also originates residential mortgages; issues trust preferred securities; and provides residential and commercial real estate, construction, and commercial and industrial loans, as well as other consumer loans, such as term loans, car loans, and boat loans to small to medium-sized businesses, professionals, real estate investors, and small residential builders and individuals. Capital Bancorp, Inc. was founded in 1974 and is headquartered in Rockville, Maryland.

About Horizon Bancorp (IN)

Horizon Bancorp, Inc. operates as the bank holding company for Horizon Bank that engages in the provision of commercial and retail banking services. The company offers checking, saving, money market, certificate of deposits, individual retirement accounts, and time deposits, as well as non-interest- and interest-bearing demand deposits. It also provides commercial, residential real estate, mortgage, home equity, auto, personal, business, agricultural, and SBA loans, as well as credit cards. In addition, the company offers corporate and individual trust and agency, investment management, and real estate investment trust services; debit cards; treasury management; online and mobile banking; wealth, retirement, and estate and trust services; and sells various insurance products. It operates through full-service offices in northern and central Indiana and southern and central Michigan. Horizon Bancorp, Inc. was founded in 1873 and is headquartered in Michigan City, Indiana.