First Mid-Illinois Bancshares (NASDAQ:FMBH) and Independent Bank Group (NASDAQ:IBTX) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, institutional ownership, valuation, profitability, dividends, earnings and analyst recommendations.
First Mid-Illinois Bancshares pays an annual dividend of $0.72 per share and has a dividend yield of 2.2%. Independent Bank Group pays an annual dividend of $0.56 per share and has a dividend yield of 1.1%. First Mid-Illinois Bancshares pays out 32.1% of its earnings in the form of a dividend. Independent Bank Group pays out 16.2% 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. First Mid-Illinois Bancshares has raised its dividend for 2 consecutive years and Independent Bank Group has raised its dividend for 5 consecutive years.
This is a summary of current ratings and target prices for First Mid-Illinois Bancshares and Independent Bank Group, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|First Mid-Illinois Bancshares||0||0||3||0||3.00|
|Independent Bank Group||0||1||4||0||2.80|
First Mid-Illinois Bancshares currently has a consensus price target of $42.67, suggesting a potential upside of 28.90%. Independent Bank Group has a consensus price target of $66.50, suggesting a potential upside of 33.96%. Given Independent Bank Group’s higher possible upside, analysts plainly believe Independent Bank Group is more favorable than First Mid-Illinois Bancshares.
This table compares First Mid-Illinois Bancshares and Independent Bank Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|First Mid-Illinois Bancshares||21.57%||9.91%||1.16%|
|Independent Bank Group||26.53%||8.51%||1.32%|
Valuation & Earnings
This table compares First Mid-Illinois Bancshares and Independent Bank Group’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|First Mid-Illinois Bancshares||$129.89 million||3.90||$26.68 million||$2.24||14.78|
|Independent Bank Group||$349.20 million||4.33||$76.51 million||$3.45||14.39|
Independent Bank Group has higher revenue and earnings than First Mid-Illinois Bancshares. Independent Bank Group is trading at a lower price-to-earnings ratio than First Mid-Illinois Bancshares, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
30.4% of First Mid-Illinois Bancshares shares are held by institutional investors. Comparatively, 61.1% of Independent Bank Group shares are held by institutional investors. 17.8% of First Mid-Illinois Bancshares shares are held by insiders. Comparatively, 10.9% of Independent Bank Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Volatility & Risk
First Mid-Illinois Bancshares has a beta of 0.45, suggesting that its share price is 55% less volatile than the S&P 500. Comparatively, Independent Bank Group has a beta of 1.35, suggesting that its share price is 35% more volatile than the S&P 500.
Independent Bank Group beats First Mid-Illinois Bancshares on 12 of the 17 factors compared between the two stocks.
First Mid-Illinois Bancshares Company Profile
First Mid-Illinois Bancshares, Inc., through its subsidiaries, provides community banking products and services to commercial, retail, and agricultural customers in the United States. The company accepts various deposit products, such as demand deposits, savings accounts, NOW accounts, money market deposits, and time deposits. Its loan products include commercial real estate, commercial and industrial, agricultural and agricultural real estate, residential real estate, and consumer loans; and other loans comprising loans to municipalities to support community projects, such as infrastructure improvements or equipment purchases. The company also offers wealth management services, which include estate planning, investment, and farm management services for individuals; and employee benefit services for business enterprises. In addition, it provides commercial lines insurance to businesses, as well as homeowner, automobile, health, life, and other types of personal lines insurance to individuals. The company operates a network of 52 banking centers in 37 Illinois and Missouri communities. First Mid-Illinois Bancshares, Inc. was incorporated in 1981 and is headquartered in Mattoon, Illinois.
Independent Bank Group Company Profile
Independent Bank Group, Inc. operates as the bank holding company for Independent Bank that provides a range of commercial banking products and services to businesses, professionals, and individuals in the United States. It offers various deposit products, including checking and savings accounts, demand accounts, money market accounts, and certificates of deposit, as well as individual retirement accounts. The company also provides commercial real estate loans; commercial construction, land, and land development loans; residential real estate loans; single family interim construction loans; commercial loans comprising SBA guaranteed loans, business term loans, equipment financing, and lines of credit and energy related loans; agricultural loans for farmers and ranchers; consumer loans, such as installment loans comprising loans to purchase cars, boats, and other recreational vehicles; and residential mortgages. In addition, it offers debit cards, online banking, mobile banking, eStatements, bank-by-mail, and direct deposit services; and business accounts and management services, including analyzed business checking, business savings, and treasury management services. As of September 13, 2018, the company operated 74 banking offices locations that extend from the Gulf Coast of Texas to the Rocky Mountains. Independent Bank Group, Inc. was founded in 2002 and is headquartered in McKinney, Texas.
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