Contrasting German American Bancorp (NASDAQ:GABC) and HomeTrust Bancshares (NYSE:HTB)

HomeTrust Bancshares (NYSE:HTB) and German American Bancorp (NASDAQ:GABC) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, risk, institutional ownership, profitability, earnings, dividends and valuation.

Profitability

This table compares HomeTrust Bancshares and German American Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
HomeTrust Bancshares	22.50%	10.88%	1.45%
German American Bancorp	28.25%	12.14%	1.69%

Earnings and Valuation

This table compares HomeTrust Bancshares and German American Bancorp”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HomeTrust Bancshares	$292.47 million	2.66	$64.36 million	$3.81	12.21
German American Bancorp	$487.40 million	3.81	$112.64 million	$3.79	13.03

German American Bancorp has higher revenue and earnings than HomeTrust Bancshares. HomeTrust Bancshares 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.

Dividends

HomeTrust Bancshares pays an annual dividend of $0.60 per share and has a dividend yield of 1.3%. German American Bancorp pays an annual dividend of $1.24 per share and has a dividend yield of 2.5%. HomeTrust Bancshares pays out 15.7% of its earnings in the form of a dividend. German American Bancorp pays out 32.7% 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. German American Bancorp has increased its dividend for 13 consecutive years. German American Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

HomeTrust Bancshares has a beta of 0.81, suggesting that its stock price is 19% less volatile than the S&P 500. Comparatively, German American Bancorp has a beta of 0.61, suggesting that its stock price is 39% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations for HomeTrust Bancshares and German American Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HomeTrust Bancshares	0	2	2	1	2.80
German American Bancorp	0	2	2	1	2.80

HomeTrust Bancshares presently has a consensus target price of $52.00, suggesting a potential upside of 11.74%. German American Bancorp has a consensus target price of $53.33, suggesting a potential upside of 7.96%. Given HomeTrust Bancshares’ higher probable upside, equities research analysts plainly believe HomeTrust Bancshares is more favorable than German American Bancorp.

Institutional & Insider Ownership

60.9% of HomeTrust Bancshares shares are held by institutional investors. Comparatively, 46.9% of German American Bancorp shares are held by institutional investors. 11.0% of HomeTrust Bancshares shares are held by company insiders. Comparatively, 3.2% of German American Bancorp shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

German American Bancorp beats HomeTrust Bancshares on 9 of the 15 factors compared between the two stocks.

About HomeTrust Bancshares

HomeTrust Bancshares, Inc. operates as the bank holding company for HomeTrust Bank that provides a range of retail and commercial banking products and services. Its deposit products include savings, money market, and demand accounts, as well as certificates of deposit for individuals, businesses, and nonprofit organizations. The company’s loan portfolio comprises retail consumer loans, such as one-to-four-family real estate lending, home equity lines of credit, construction and land/lots, indirect auto finance, and consumer lending; and commercial loans that include commercial real estate, construction and development, and commercial and industrial loans. It also provides small business administration loans, equipment finance leases, indirect automobile loans, and municipal leases; and cash management and online/mobile banking services. As of June 30, 2021, the company operated 41 offices in North Carolina, Upstate South Carolina, East Tennessee, and Southwest Virginia. HomeTrust Bancshares, Inc. was founded in 1926 and is headquartered in Asheville, North Carolina.

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.