Head to Head Contrast: ConnectOne Bancorp (NASDAQ:CNOB) vs. Independent Bank (NASDAQ:IBCP)

ConnectOne Bancorp (NASDAQ:CNOBGet Rating) and Independent Bank (NASDAQ:IBCPGet Rating) are both small-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, dividends, risk, profitability, institutional ownership, valuation and analyst recommendations.

Earnings & Valuation

This table compares ConnectOne Bancorp and Independent Bank’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
ConnectOne Bancorp $317.43 million 3.12 $130.35 million $3.12 8.09
Independent Bank $214.72 million 1.98 $62.90 million $2.76 7.31

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

Profitability

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

Net Margins Return on Equity Return on Assets
ConnectOne Bancorp 38.52% 12.69% 1.55%
Independent Bank 27.75% 16.01% 1.26%

Dividends

ConnectOne Bancorp pays an annual dividend of $0.62 per share and has a dividend yield of 2.5%. Independent Bank pays an annual dividend of $0.88 per share and has a dividend yield of 4.4%. ConnectOne Bancorp pays out 19.9% of its earnings in the form of a dividend. Independent Bank pays out 31.9% 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. ConnectOne Bancorp has increased its dividend for 2 consecutive years and Independent Bank has increased its dividend for 8 consecutive years. Independent Bank is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

68.1% of ConnectOne Bancorp shares are held by institutional investors. Comparatively, 80.3% of Independent Bank shares are held by institutional investors. 6.6% of ConnectOne Bancorp shares are held by company insiders. Comparatively, 5.2% of Independent Bank shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and target prices for ConnectOne Bancorp and Independent Bank, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ConnectOne Bancorp 0 0 2 0 3.00
Independent Bank 0 1 0 0 2.00

ConnectOne Bancorp presently has a consensus target price of $30.00, suggesting a potential upside of 18.86%. Independent Bank has a consensus target price of $20.00, suggesting a potential downside of 0.84%. Given ConnectOne Bancorp’s stronger consensus rating and higher probable upside, equities analysts clearly believe ConnectOne Bancorp is more favorable than Independent Bank.

Volatility & Risk

ConnectOne Bancorp has a beta of 1.24, meaning that its share price is 24% more volatile than the S&P 500. Comparatively, Independent Bank has a beta of 0.96, meaning that its share price is 4% less volatile than the S&P 500.

Summary

ConnectOne Bancorp beats Independent Bank on 13 of the 17 factors compared between the two stocks.

About ConnectOne Bancorp

(Get Rating)

ConnectOne Bancorp, Inc. operates as the bank holding company for ConnectOne Bank that provides commercial banking products and services for small and mid-sized businesses, local professionals, and individuals in the Northern New Jersey and New York Metropolitan area, and South Florida market. The company offers personal and business checking, retirement, money market, and time and savings accounts. It also provides consumer and commercial business loans on a secured and unsecured basis; revolving lines of credit; commercial mortgage loans; residential mortgages on primary and secondary residences; home equity loans; bridge loans; other personal purpose loans; and commercial construction and real estate loans. In addition, the company offers check cards, ATM cards, credit cards, wire transfers, access to automated teller services, Internet banking, treasury direct, automated clearing house origination, mobile banking by phone, safe deposit boxes, and remote deposit capture services. It operates through a network of eight banking offices in Bergen County, five banking offices in Union County, one banking office in Morris County, one office in Essex County, one office in Hudson County, one office in Monmouth County, one banking office in Manhattan in New York City, one office in Nassau County on Long Island, one in Astoria, and five branches in the Hudson Valley, as well as one financial center in West Palm Beach in Palm Beach County. The company was formerly known as Center Bancorp, Inc. and changed its name to ConnectOne Bancorp, Inc. in July 2014. ConnectOne Bancorp, Inc. was incorporated in 1982 and is headquartered in Englewood Cliffs, New Jersey.

About Independent Bank

(Get Rating)

Independent Bank Corporation operates as the bank holding company for Independent Bank that provides various banking services to individuals and businesses. The company offers checking and savings accounts, commercial lending, direct and indirect consumer financing, mortgage lending, and safe deposit box services, as well as automatic teller machine, and Internet and mobile banking services. It also provides title insurance, insurance brokerage, and investment services. The company offers its services through approximately 59 branches, two drive-thru facilities, and seven loan production offices in Michigan; and two loan production offices in Ohio. Independent Bank Corporation was founded in 1864 and is based in Grand Rapids, Michigan.

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