Reviewing Independent Bank (NASDAQ:IBCP) and Chester Bancorp (OTCMKTS:CNBA)

Independent Bank (NASDAQ:IBCP) and Chester Bancorp (OTCMKTS:CNBA) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, earnings, risk, profitability and valuation.

Risk & Volatility

Independent Bank has a beta of 0.8, meaning that its share price is 20% less volatile than the S&P 500. Comparatively, Chester Bancorp has a beta of 0.51, meaning that its share price is 49% less volatile than the S&P 500.

Valuation and Earnings

This table compares Independent Bank and Chester Bancorp”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Independent Bank	$323.14 million	2.24	$66.79 million	$3.26	10.75
Chester Bancorp	N/A	N/A	N/A	N/A	N/A

Independent Bank has higher revenue and earnings than Chester Bancorp.

Institutional & Insider Ownership

79.4% of Independent Bank shares are owned by institutional investors. 5.7% of Independent Bank shares are owned by insiders. Comparatively, 38.8% of Chester Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Independent Bank pays an annual dividend of $1.04 per share and has a dividend yield of 3.0%. Chester Bancorp pays an annual dividend of $0.68 per share and has a dividend yield of 16.3%. Independent Bank pays out 31.9% of its earnings in the form of a dividend. Independent Bank has increased its dividend for 11 consecutive years.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Independent Bank and Chester Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Independent Bank	0	3	1	0	2.25
Chester Bancorp	0	0	0	0	0.00

Independent Bank presently has a consensus target price of $36.00, indicating a potential upside of 2.71%. Given Independent Bank’s stronger consensus rating and higher possible upside, equities analysts plainly believe Independent Bank is more favorable than Chester Bancorp.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Independent Bank	21.25%	14.54%	1.27%
Chester Bancorp	N/A	N/A	N/A

Summary

Independent Bank beats Chester Bancorp on 10 of the 13 factors compared between the two stocks.

About Independent Bank

Independent Bank Corporation operates as the bank holding company for Independent Bank that provides commercial banking services to individuals and businesses in rural and suburban communities in Michigan. It offers checking and savings accounts, commercial lending, direct and indirect consumer financing, mortgage lending, and safe deposit box services. The company also provides title insurance services and investment services, as well as automatic teller machines, and internet and mobile banking services. In addition, it operates through branches, drive-thru facilities, and loan production offices. Independent Bank Corporation was founded in 1864 and is based in Grand Rapids, Michigan.

About Chester Bancorp

Chester Bancorp, Inc. operates as the holding company for Chester National Bank that provides various banking products and services to individuals and businesses in Chester, Illinois. It offers checking accounts, such as regular checking, student checking, golden checking, and club checking accounts; savings accounts, including statement savings, Christmas club, and money market accounts; and certificate of deposits and individual retirement accounts. The company also provides loans comprising mortgage, construction, lot, home equity, consumer, and business loans; and reorder check services. It operates two full service offices in Sparta, Illinois; and Perryville, Missouri. Chester Bancorp, Inc. was founded in 1996 and is based in Chester, Illinois.