Head to Head Contrast: Southern Michigan Bancorp (OTCMKTS:SOMC) vs. HBT Financial (NASDAQ:HBT)

HBT Financial (NASDAQ:HBT) and Southern Michigan Bancorp (OTCMKTS:SOMC) are both small-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, dividends, profitability, valuation, risk and earnings.

Dividends

HBT Financial pays an annual dividend of $0.84 per share and has a dividend yield of 3.5%. Southern Michigan Bancorp pays an annual dividend of $0.64 per share and has a dividend yield of 2.7%. HBT Financial pays out 33.9% of its earnings in the form of a dividend. Southern Michigan Bancorp pays out 24.8% 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. HBT Financial has raised its dividend for 5 consecutive years. HBT Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares HBT Financial and Southern Michigan Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
HBT Financial	26.64%	13.81%	1.57%
Southern Michigan Bancorp	13.18%	10.82%	0.77%

Analyst Recommendations

This is a summary of current recommendations and price targets for HBT Financial and Southern Michigan Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HBT Financial	0	4	3	0	2.43
Southern Michigan Bancorp	0	0	0	0	0.00

HBT Financial currently has a consensus price target of $28.50, suggesting a potential upside of 19.49%. Given HBT Financial’s stronger consensus rating and higher probable upside, equities analysts clearly believe HBT Financial is more favorable than Southern Michigan Bancorp.

Volatility and Risk

HBT Financial has a beta of 0.66, suggesting that its share price is 34% less volatile than the S&P 500. Comparatively, Southern Michigan Bancorp has a beta of 0.13, suggesting that its share price is 87% less volatile than the S&P 500.

Insider and Institutional Ownership

78.6% of HBT Financial shares are held by institutional investors. 59.7% of HBT Financial shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares HBT Financial and Southern Michigan Bancorp”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HBT Financial	$287.27 million	2.61	$71.78 million	$2.48	9.62
Southern Michigan Bancorp	$84.61 million	1.29	$10.40 million	$2.58	9.13

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

Summary

HBT Financial beats Southern Michigan Bancorp on 15 of the 17 factors compared between the two stocks.

About HBT Financial

HBT Financial, Inc. operates as the bank holding company for Heartland Bank and Trust Company that provides business, commercial, and retail banking products and services to individuals, businesses, and municipal entities in Central and Northeastern Illinois, and Eastern Iowa. The company's deposits accounts consist of noninterest-bearing demand deposits, interest-bearing transaction accounts, money market accounts, savings accounts, certificates of deposits, health savings accounts, and individual retirement accounts. Its loan offering comprises owner and non-owner occupied commercial real estate; construction and land development and multi-family; commercial and industrial; agricultural and farmland; and one-to-four family residential loans, as well as municipal, consumer, and other loans. The company also offers wealth management services, including financial planning to consumers, trusts, and estates; trustee and custodial; investment management; corporate retirement plan consulting and administration; and retail brokerage services. In addition, it provides farmland management, and farmland sales and services; commercial checking accounts; and treasury management services, as well as originates and sells residential mortgage loans. Further, the company offers digital banking services, such as online and mobile banking, and digital payment services, as well as personal financial management tools. The company was formerly known as Heartland Bancorp, Inc. and changed its name to HBT Financial, Inc. in September 2019. HBT Financial, Inc. was founded in 1920 and is headquartered in Bloomington, Illinois.

About Southern Michigan Bancorp

Southern Michigan Bancorp, Inc. operates as the bank holding company for Southern Michigan Bank & Trust that provides a range of commercial banking services to individuals, businesses, institutions, and governmental agencies primarily in the southwest Michigan communities. Its deposit products include interest and non-interest checking, savings, and various types of money market accounts; time, savings, and demand deposits; and certificates of deposit and IRAs. The company also provides home mortgages and equity loans, home equity lines of credit, VA and FHA home loans, USDA rural development loans, and auto/personal loans; business loans, such as lines of credit, term loans, commercial real estate loans, commercial and industrial loans, agriculture loans, letters of credit, small business administration loans, and capital access loans; industrial, construction, real estate, and inventory loans; and consumer lending products comprising direct and indirect loans to purchasers of residential real property and consumer goods. In addition, it offers trust and investment services that include investment management, trustee, IRA rollovers and retirement plan, institutional and personal custody, estate settlement, wealth management, estate and wealth transfer planning assistance, charitable gift planning assistance, and cash management custody services; and safe deposit box and automated teller machine services. Further, the company provides bill pay, e-statements, ACH, wire transfer, remote deposit capture, and insurance services, as well as ATM, debit, credit, and gift cards. The company was founded in 1871 and is based in Coldwater, Michigan.