Reviewing German American Bancorp (NASDAQ:GABC) & First Financial Corporation Indiana (NASDAQ:THFF)

First Financial Corporation Indiana (NASDAQ:THFF) and German American Bancorp (NASDAQ:GABC) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, risk, dividends, valuation, analyst recommendations, profitability and earnings.

Institutional & Insider Ownership

72.7% of First Financial Corporation Indiana shares are held by institutional investors. Comparatively, 46.9% of German American Bancorp shares are held by institutional investors. 3.7% of First Financial Corporation Indiana shares are held by insiders. Comparatively, 6.2% of German American Bancorp shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Dividends

First Financial Corporation Indiana pays an annual dividend of $2.24 per share and has a dividend yield of 3.3%. German American Bancorp pays an annual dividend of $1.16 per share and has a dividend yield of 2.6%. First Financial Corporation Indiana pays out 33.5% of its earnings in the form of a dividend. German American Bancorp pays out 38.3% 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. First Financial Corporation Indiana has raised its dividend for 2 consecutive years and German American Bancorp has raised its dividend for 13 consecutive years. First Financial Corporation Indiana is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares First Financial Corporation Indiana and German American Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Financial Corporation Indiana	22.79%	13.34%	1.41%
German American Bancorp	23.11%	12.02%	1.55%

Earnings & Valuation

This table compares First Financial Corporation Indiana and German American Bancorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Financial Corporation Indiana	$347.56 million	2.31	$47.28 million	$6.68	10.13
German American Bancorp	$487.40 million	3.40	$112.64 million	$3.03	14.60

German American Bancorp has higher revenue and earnings than First Financial Corporation Indiana. First Financial Corporation Indiana is trading at a lower price-to-earnings ratio than German American Bancorp, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent recommendations and price targets for First Financial Corporation Indiana and German American Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Financial Corporation Indiana	0	3	2	0	2.40
German American Bancorp	0	2	1	0	2.33

First Financial Corporation Indiana currently has a consensus target price of $60.00, suggesting a potential downside of 11.36%. German American Bancorp has a consensus target price of $46.50, suggesting a potential upside of 5.13%. Given German American Bancorp’s higher possible upside, analysts clearly believe German American Bancorp is more favorable than First Financial Corporation Indiana.

Risk and Volatility

First Financial Corporation Indiana has a beta of 0.42, meaning that its stock price is 58% less volatile than the S&P 500. Comparatively, German American Bancorp has a beta of 0.67, meaning that its stock price is 33% less volatile than the S&P 500.

Summary

German American Bancorp beats First Financial Corporation Indiana on 10 of the 17 factors compared between the two stocks.

About First Financial Corporation Indiana

First Financial Corporation, through its subsidiaries, provides various financial services. The company offers non-interest-bearing demand, interest-bearing demand, savings, time, and other time deposits. It also provides commercial loans primarily to expand a business or finance asset purchases; residential real estate and residential real estate construction loans; and home equity loans and lines, secured loans, and cash/CD secured and unsecured loans. In addition, the company offers lease financing, trust account, depositor, and insurance services. The company was founded in 1834 and is headquartered in Terre Haute, Indiana.

About German American Bancorp

German American Bancorp, Inc. operates as a financial holding company for German American Bank that provides retail and commercial banking services. The company operates through three segments: Core Banking, Wealth Management Services, and Insurance Operations. The Core Banking segment accepts deposits from the general public; and originates consumer, commercial and agricultural, commercial and agricultural real estate, and residential mortgage loans, as well as sells residential mortgage loans in the secondary market. The Wealth Management segment provides trust, investment advisory, brokerage, and retirement planning services. The Insurance Operations segment offers a range of personal and corporate property and casualty insurance products. It also offers checking, saving, and individual retirement accounts; certificates of deposit; wire transfer; credit cards; home equity, mortgages, and small business; treasury management; and online and mobile banking, bill pay, digital wallet, mobile check deposit, credit score and report, money management, and estatements, as well as wealth advisory. German American Bancorp, Inc. was founded in 1910 and is based in Jasper, Indiana.