Contrasting Bank of Marin Bancorp (NASDAQ:BMRC) & Horizon Bancorp (NASDAQ:HBNC)

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

Risk & Volatility

Bank of Marin Bancorp has a beta of 0.84, meaning that its share price is 16% less volatile than the S&P 500. Comparatively, Horizon Bancorp has a beta of 0.87, meaning that its share price is 13% less volatile than the S&P 500.

Profitability

This table compares Bank of Marin Bancorp and Horizon Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bank of Marin Bancorp	-5.52%	3.33%	0.39%
Horizon Bancorp	9.86%	8.48%	0.79%

Analyst Recommendations

This is a breakdown of recent recommendations for Bank of Marin Bancorp and Horizon Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bank of Marin Bancorp	0	0	3	0	3.00
Horizon Bancorp	0	2	1	0	2.33

Bank of Marin Bancorp presently has a consensus target price of $26.67, indicating a potential upside of 24.84%. Horizon Bancorp has a consensus target price of $17.33, indicating a potential upside of 14.79%. Given Bank of Marin Bancorp’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Bank of Marin Bancorp is more favorable than Horizon Bancorp.

Institutional & Insider Ownership

52.3% of Bank of Marin Bancorp shares are held by institutional investors. Comparatively, 64.5% of Horizon Bancorp shares are held by institutional investors. 5.7% of Bank of Marin Bancorp shares are held by insiders. Comparatively, 2.8% of Horizon 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.

Earnings & Valuation

This table compares Bank of Marin Bancorp and Horizon Bancorp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bank of Marin Bancorp	$72.06 million	4.80	-$8.41 million	($0.40)	-53.40
Horizon Bancorp	$203.08 million	3.27	$35.43 million	$1.02	14.80

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

Dividends

Bank of Marin Bancorp pays an annual dividend of $1.00 per share and has a dividend yield of 4.7%. Horizon Bancorp pays an annual dividend of $0.64 per share and has a dividend yield of 4.2%. Bank of Marin Bancorp pays out -250.0% of its earnings in the form of a dividend. Horizon Bancorp pays out 62.7% 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. Bank of Marin Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Horizon Bancorp beats Bank of Marin Bancorp on 9 of the 16 factors compared between the two stocks.

About Bank of Marin Bancorp

Bank of Marin Bancorp operates as the holding company for Bank of Marin that provides a range of financial services primarily to small to medium-sized businesses, not-for-profit organizations, and commercial real estate investors in the United States. The company offers personal and business checking and savings accounts; and individual retirement, health savings, and demand deposit marketplace accounts, as well as time certificates of deposit, certificate of deposit account registry, and insured cash sweep services. It also provides commercial real estate, commercial and industrial, and consumer loans, as well as construction financing and home equity lines of credit. In addition, the company offers merchant and payroll services; commercial equipment leasing program; payment solutions; treasury management services; credit cards; and mobile deposit, remote deposit capture, automated clearing house, wire transfer, and image lockbox services. Further, it provides wealth management and trust services comprising customized investment portfolio management, financial planning, trust administration, estate settlement, and custody services, as well as 401(k) plan services; and automated teller machines, and telephone and digital banking services. The company was incorporated in 1989 and is headquartered in Novato, California.

About Horizon Bancorp

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.