Critical Contrast: Bar Harbor Bankshares (NYSE:BHB) & Isabella Bank (NASDAQ:ISBA)

Bar Harbor Bankshares (NYSE:BHB) and Isabella Bank (NASDAQ:ISBA) are both small-cap financial services companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, institutional ownership, profitability, risk, valuation and earnings.

Institutional & Insider Ownership

54.5% of Bar Harbor Bankshares shares are owned by institutional investors. 2.6% of Bar Harbor Bankshares shares are owned by insiders. Comparatively, 9.7% of Isabella Bank shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Bar Harbor Bankshares and Isabella Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bar Harbor Bankshares	N/A	N/A	N/A
Isabella Bank	15.18%	7.83%	0.80%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Bar Harbor Bankshares and Isabella Bank, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bar Harbor Bankshares	0	1	1	0	2.50
Isabella Bank	0	1	1	0	2.50

Bar Harbor Bankshares currently has a consensus target price of $35.00, indicating a potential upside of 17.25%. Isabella Bank has a consensus target price of $34.00, indicating a potential downside of 5.53%. Given Bar Harbor Bankshares’ higher probable upside, research analysts clearly believe Bar Harbor Bankshares is more favorable than Isabella Bank.

Valuation and Earnings

This table compares Bar Harbor Bankshares and Isabella Bank”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bar Harbor Bankshares	$147.73 million	3.37	$43.04 million	$2.58	11.57
Isabella Bank	$70.49 million	3.76	$13.89 million	$2.19	16.43

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

Volatility & Risk

Bar Harbor Bankshares has a beta of 0.71, suggesting that its stock price is 29% less volatile than the S&P 500. Comparatively, Isabella Bank has a beta of 0.12, suggesting that its stock price is 88% less volatile than the S&P 500.

Dividends

Bar Harbor Bankshares pays an annual dividend of $1.28 per share and has a dividend yield of 4.3%. Isabella Bank pays an annual dividend of $1.12 per share and has a dividend yield of 3.1%. Bar Harbor Bankshares pays out 49.6% of its earnings in the form of a dividend. Isabella Bank pays out 51.1% 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. Bar Harbor Bankshares has increased its dividend for 22 consecutive years. Bar Harbor Bankshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Bar Harbor Bankshares beats Isabella Bank on 9 of the 15 factors compared between the two stocks.

About Bar Harbor Bankshares

Bar Harbor Bankshares operates as the holding company for Bar Harbor Bank & Trust that provides commercial, lending, retail, and wealth management banking services. It accepts various deposit products, including interest-bearing and non-interest-bearing demand accounts, savings accounts, time deposits, and money market deposit accounts, as well as certificates of deposit. The company also provides commercial real estate loans, such as multi-family, commercial construction and land development, and other commercial real estate classes; commercial and industrial loans, including loans to commercial and agricultural businesses, and tax exempt entities; residential real estate loans consists of mortgages for 1-4 family housing; and consumer loans comprises home equity loans, lines of credit, auto, and other installment lending. In addition, it provides life insurance, annuity, and retirement products, as well as financial planning services; and third-party investment and insurance services. Further, the company offers trust and estate administration, wealth advisory, and investment management services to individuals, businesses, not-for-profit organizations, and municipalities; and 401K plan, financial, estate and charitable planning, investment management, family office, municipal, and tax services. It operates 53 locations across Maine, New Hampshire, and Vermont. The company was founded in 1887 and is based in Bar Harbor, Maine.

About Isabella Bank

Isabella Bank Corporation operates as the bank holding company for Isabella Bank that provides various banking products and services to businesses, institutions, and individuals and their families. Its deposit products include checking accounts, savings accounts, certificates of deposit, direct deposits, and money market accounts. The company’s loan portfolio comprises commercial, agricultural, and residential real estate loans, as well as consumer loans, including secured and unsecured personal loans. It also offers cash management, mobile and internet banking, electronic bill pay, automated teller machines, trust and investment, estate planning, and safe deposit box rental services; and group life, health, accident, disability, and other insurance products, as well as other employee benefit programs. As of December 31, 2021, the company operated 30 banking offices in Clare, Gratiot, Isabella, Mecosta, Midland, Montcalm, and Saginaw counties. Isabella Bank Corporation was founded in 1903 and is headquartered in Mount Pleasant, Michigan.