Contrasting International Bancshares (NASDAQ:IBOC) & Independent Bank (NASDAQ:INDB)

Independent Bank (NASDAQ:INDB) and International Bancshares (NASDAQ:IBOC) are both mid-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, institutional ownership, profitability, analyst recommendations, valuation and dividends.

Profitability

This table compares Independent Bank and International Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Independent Bank	22.42%	7.41%	1.11%
International Bancshares	40.92%	17.50%	2.71%

Institutional and Insider Ownership

83.4% of Independent Bank shares are owned by institutional investors. Comparatively, 65.9% of International Bancshares shares are owned by institutional investors. 0.9% of Independent Bank shares are owned by insiders. Comparatively, 13.9% of International Bancshares shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Independent Bank and International Bancshares’ revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Independent Bank	$693.61 million	3.93	$239.50 million	$5.18	12.38
International Bancshares	$833.75 million	5.16	$411.77 million	$6.55	10.57

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

Volatility and Risk

Independent Bank has a beta of 0.77, indicating that its share price is 23% less volatile than the S&P 500. Comparatively, International Bancshares has a beta of 0.89, indicating that its share price is 11% less volatile than the S&P 500.

Dividends

Independent Bank pays an annual dividend of $2.28 per share and has a dividend yield of 3.6%. International Bancshares pays an annual dividend of $1.32 per share and has a dividend yield of 1.9%. Independent Bank pays out 44.0% of its earnings in the form of a dividend. International Bancshares pays out 20.2% 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. Independent Bank has increased its dividend for 14 consecutive years and International Bancshares has increased its dividend for 15 consecutive years.

Analyst Ratings

This is a summary of current ratings and recommmendations for Independent Bank and International Bancshares, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Independent Bank	0	1	0	1	3.00
International Bancshares	0	0	0	0	N/A

Independent Bank currently has a consensus price target of $60.00, indicating a potential downside of 6.47%. Given Independent Bank’s higher possible upside, equities analysts plainly believe Independent Bank is more favorable than International Bancshares.

Summary

International Bancshares beats Independent Bank on 11 of the 16 factors compared between the two stocks.

About Independent Bank

Independent Bank Corp. operates as the bank holding company for Rockland Trust Company that provides commercial banking products and services to individuals and small-to-medium sized businesses in the United States. The company provides interest checking, money market, and savings accounts, as well as demand deposits and time certificates of deposit. It offers commercial real estate and construction, commercial and industrial, small business, secured and unsecured commercial, and consumer real estate loans; term loans and revolving/nonrevolving lines of credit; overdraft protection and letters of credit; and residential mortgages and home equity loans and lines. In addition, the company provides cash management services, such as ACH transaction processing, positive pay, and remote deposit services; investment management and trust services to individuals, institutions, small businesses, and charitable institutions; mobile, online, and telephone banking; estate settlement, financial planning, tax services, and other services; automated teller machines; debit and credit cards; and mutual fund and unit investment trust shares, third party model portfolios, general securities, fixed and variable annuities, and life insurance products, as well as advisory platforms. Further, it invests in low-income housing tax credit projects; holds, maintains, and disposes foreclosed properties; and operates as an investment advisor. Independent Bank Corp. was founded in 1907 and is headquartered in Rockland, Massachusetts.

About International Bancshares

International Bancshares Corporation, a financial holding company, provides commercial and retail banking services in Texas and the State of Oklahoma. It accepts checking and saving deposits; and offers commercial, real estate, personal, home improvement, automobile, and other installment and term loans. The company also provides international banking services, including letters of credit, commercial and industrial loans, and foreign exchange services. In addition, it offers other banking related services, such as credit cards, safety deposit boxes, collection, notary public, escrow, drive up and walk up facilities, and other customary banking services; and Internet banking services, as well as securities products through third party providers. The company was founded in 1966 and is headquartered in Laredo, Texas.