German American Bancorp (NASDAQ: GABC) and Peoples Bancorp (NASDAQ:PEBO) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, risk, analyst recommendations, dividends, valuation and profitabiliy.

Analyst Ratings

This is a breakdown of current ratings and price targets for German American Bancorp and Peoples Bancorp, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
German American Bancorp 0 4 0 0 2.00
Peoples Bancorp 0 3 0 0 2.00

German American Bancorp presently has a consensus target price of $38.67, indicating a potential upside of 18.86%. Peoples Bancorp has a consensus target price of $32.50, indicating a potential downside of 3.50%. Given German American Bancorp’s higher possible upside, research analysts plainly believe German American Bancorp is more favorable than Peoples Bancorp.

Profitability

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

Net Margins Return on Equity Return on Assets
German American Bancorp 28.14% 11.78% 1.34%
Peoples Bancorp 19.01% 7.28% 0.94%

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
German American Bancorp $130.98 million 5.69 $36.53 million $1.59 20.42
Peoples Bancorp $154.96 million 3.91 $31.65 million $1.76 19.14

German American Bancorp has higher revenue, but lower earnings than Peoples Bancorp. Peoples Bancorp 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

German American Bancorp pays an annual dividend of $0.52 per share and has a dividend yield of 1.6%. Peoples Bancorp pays an annual dividend of $0.80 per share and has a dividend yield of 2.4%. German American Bancorp pays out 32.6% of its earnings in the form of a dividend. Peoples Bancorp pays out 45.5% 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.

Volatility & Risk

German American Bancorp has a beta of 1.2, suggesting that its stock price is 20% more volatile than the S&P 500. Comparatively, Peoples Bancorp has a beta of 0.86, suggesting that its stock price is 14% less volatile than the S&P 500.

Insider & Institutional Ownership

22.6% of German American Bancorp shares are held by institutional investors. Comparatively, 62.2% of Peoples Bancorp shares are held by institutional investors. 8.5% of German American Bancorp shares are held by insiders. Comparatively, 3.0% of Peoples Bancorp shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

German American Bancorp beats Peoples Bancorp on 10 of the 14 factors compared between the two stocks.

German American Bancorp Company Profile

German American Bancorp, Inc. is a bank holding company. As of December 31, 2016, the Company, through its banking subsidiary German American Bancorp, operated 51 banking offices in 19 contiguous southern Indiana counties and one northern Kentucky county. Its segments are core banking, trust and investment advisory services, insurance, and other. The core banking segment involves attracting deposits from the general public and using such funds to originate consumer, commercial and agricultural, commercial and agricultural real estate, and residential mortgage loans, primarily in its local markets. The core banking segment also involves the sale of residential mortgage loans in the secondary market. The trust and investment advisory services segment involves providing trust, investment advisory, and brokerage services to customers. The insurance segment offers a range of personal and corporate property and casualty insurance products, in its banking subsidiary’s local markets.

Peoples Bancorp Company Profile

Peoples Bancorp Inc. is a financial holding company. The Company operates principally through its subsidiary, Peoples Bank. Peoples Bank’s operating subsidiaries include Peoples Insurance Agency, LLC (Peoples Insurance) and two asset management companies, PBNA, L.L.C. and Peoples Tax Credit Equity, LLC. Peoples Investment Company has one subsidiary, Peoples Capital Corporation. The Company offers banking, insurance, investment and trust solutions. Its products and services include various demand deposit accounts, savings accounts, money market accounts and certificates of deposit; commercial, consumer and real estate mortgage loans (both commercial and residential) and lines of credit; debit and automated teller machine (ATM) cards; credit cards for individuals and businesses; merchant credit card transaction processing services; corporate and personal trust services; a range of life, health and property and casualty insurance products, and brokerage services.

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