Critical Comparison: Independent Bank (NASDAQ:IBCP) & Huntington Bancshares (NASDAQ:HBAN)

Independent Bank (NASDAQ:IBCP) and Huntington Bancshares (NASDAQ:HBAN) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, risk, dividends, earnings, institutional ownership, analyst recommendations and valuation.

Analyst Ratings

This is a summary of current recommendations and price targets for Independent Bank and Huntington Bancshares, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Independent Bank	0	2	1	0	2.33
Huntington Bancshares	1	4	14	1	2.75

Independent Bank currently has a consensus target price of $37.00, suggesting a potential upside of 2.13%. Huntington Bancshares has a consensus target price of $20.05, suggesting a potential upside of 12.70%. Given Huntington Bancshares’ stronger consensus rating and higher possible upside, analysts plainly believe Huntington Bancshares is more favorable than Independent Bank.

Dividends

Independent Bank pays an annual dividend of $1.12 per share and has a dividend yield of 3.1%. Huntington Bancshares pays an annual dividend of $0.62 per share and has a dividend yield of 3.5%. Independent Bank pays out 33.4% of its earnings in the form of a dividend. Huntington Bancshares pays out 47.7% 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. Independent Bank has raised its dividend for 11 consecutive years.

Risk & Volatility

Independent Bank has a beta of 0.71, suggesting that its stock price is 29% less volatile than the S&P 500. Comparatively, Huntington Bancshares has a beta of 0.94, suggesting that its stock price is 6% less volatile than the S&P 500.

Insider and Institutional Ownership

79.4% of Independent Bank shares are owned by institutional investors. Comparatively, 80.7% of Huntington Bancshares shares are owned by institutional investors. 5.9% of Independent Bank shares are owned by company insiders. Comparatively, 0.7% of Huntington Bancshares shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Independent Bank and Huntington Bancshares”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Independent Bank	$315.38 million	2.37	$68.54 million	$3.35	10.81
Huntington Bancshares	$12.49 billion	2.89	$2.21 billion	$1.30	13.68

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

Profitability

This table compares Independent Bank and Huntington Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Independent Bank	22.02%	14.15%	1.27%
Huntington Bancshares	16.63%	11.42%	1.11%

Summary

Huntington Bancshares beats Independent Bank on 11 of the 18 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 Huntington Bancshares

Huntington Bancshares Incorporated operates as the bank holding company for The Huntington National Bank that provides commercial, consumer, and mortgage banking services in the United States. The company offers financial products and services to consumer and business customers, including deposits, lending, payments, mortgage banking, dealer financing, investment management, trust, brokerage, insurance, and other financial products and services. It also provides 24-hour grace, asterisk-free checking, money scout, $50 safety zone, standby cash, early pay, instant access, savings goal getter, and Huntington heads up; digitally powered consumer and business financial solutions to consumer lending, regional banking, branch banking, and wealth management customers; direct and indirect consumer loans, as well as dealer finance loans and deposits; and private banking, wealth management and legacy planning through investment and portfolio management, fiduciary administration and trust, institutional custody, and full-service retail brokerage investment services. The company offers equipment financing, asset-based lending, distribution finance, structured lending, and municipal financing solutions, as well as Huntington ChoicePay. In addition, it offers lending, liquidity, treasury management and other payment services, and capital markets; government and non-profits, healthcare, technology and telecommunications, franchises, financial sponsors, and global services; and corporate risk management, institutional sales and trading, debt and equity issuance, and additional advisory services. The company offers its products through a network of channels, including branches and ATMs, online and mobile banking, and through customer call centers to customers in middle market banking, corporate, specialty, and government banking, asset finance, commercial real estate banking, and capital markets. The company was founded in 1866 and is headquartered in Columbus, Ohio.