Analyzing Two Rivers Bancorp (NASDAQ:TRCB) & German American Bancorp. (NASDAQ:GABC)

Two Rivers Bancorp (NASDAQ:TRCB) and German American Bancorp. (NASDAQ:GABC) are both small-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, risk, institutional ownership, analyst recommendations, earnings, profitability and dividends.

Insider & Institutional Ownership

28.3% of Two Rivers Bancorp shares are held by institutional investors. Comparatively, 41.5% of German American Bancorp. shares are held by institutional investors. 15.0% of Two Rivers Bancorp shares are held by insiders. Comparatively, 7.9% of German American Bancorp. shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Two Rivers Bancorp and German American Bancorp., as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Two Rivers Bancorp 0 1 1 0 2.50
German American Bancorp. 0 1 0 0 2.00

Two Rivers Bancorp presently has a consensus price target of $18.00, suggesting a potential downside of 16.97%. German American Bancorp. has a consensus price target of $34.00, suggesting a potential downside of 2.27%. Given German American Bancorp.’s higher probable upside, analysts plainly believe German American Bancorp. is more favorable than Two Rivers Bancorp.

Valuation & Earnings

This table compares Two Rivers Bancorp and German American Bancorp.’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Two Rivers Bancorp $50.02 million 3.78 $11.21 million $1.31 16.55
German American Bancorp. $170.82 million 5.43 $46.53 million $2.14 16.26

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

Volatility & Risk

Two Rivers Bancorp has a beta of 0.29, indicating that its share price is 71% less volatile than the S&P 500. Comparatively, German American Bancorp. has a beta of 0.86, indicating that its share price is 14% less volatile than the S&P 500.

Dividends

Two Rivers Bancorp pays an annual dividend of $0.28 per share and has a dividend yield of 1.3%. German American Bancorp. pays an annual dividend of $0.68 per share and has a dividend yield of 2.0%. Two Rivers Bancorp pays out 21.4% of its earnings in the form of a dividend. German American Bancorp. pays out 31.8% 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. Two Rivers Bancorp has raised its dividend for 5 consecutive years and German American Bancorp. has raised its dividend for 6 consecutive years. German American Bancorp. is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Two Rivers Bancorp 20.47% 9.97% 1.06%
German American Bancorp. 25.57% 11.68% 1.45%

Summary

German American Bancorp. beats Two Rivers Bancorp on 12 of the 17 factors compared between the two stocks.

Two Rivers Bancorp Company Profile

Two River Bancorp operates as the bank holding company for Two River Community Bank that provides a range of banking services to small and medium-sized businesses, not-for-profit organizations, professionals, and individuals. The company offers deposit products, including checking, savings, and money market accounts, as well as certificates of deposit. It also provides construction and land development loans; commercial and industrial loans; commercial real estate loans; residential real estate loans consisting of single-family detached units, individual condominium units, two-to-four family dwelling units, and townhouses; consumer loans comprising home equity lines of credit, home equity loans, personal loans, automobile loans, and overdraft protection; participation loans; and small business administration loans. In addition, the company offers remote deposit capture, ACH, direct deposit, coin counting, night depository, corporate business, and telephone and Internet banking services; and safe deposit boxes, debit and ATM cards, money orders, wire transfers, and automated teller machines. It operates 13 branches and 2 loan production offices in Monmouth, Middlesex, Union, and Ocean Counties, New Jersey. The company was formerly known as Community Partners Bancorp and changed its name to Two River Bancorp in June 2013. Two River Bancorp was founded in 2000 and is headquartered in Tinton Falls, New Jersey.

German American Bancorp. Company Profile

German American Bancorp, Inc. operates as the bank holding company for German American Bancorp that provides retail and commercial banking services. The company operates through three segments: Core Banking, Trust and Investment Advisory Services, and Insurance Operations. The Core Banking segment accepts various 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 Trust and Investment Advisory Services segment provides trust, investment advisory, and brokerage services. The Insurance Operations segment offers a range of personal and corporate property and casualty insurance products. As of February 13, 2018, the company operated 53 banking offices in 19 contiguous southern Indiana counties and 1 northern Kentucky County. German American Bancorp, Inc. was founded in 1910 and is based in Jasper, Indiana.

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