Middleburg Financial Corp. (NASDAQ: MBRG) and Horizon Bancorp (IN) (NASDAQ:HBNC) are both financials companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, risk, earnings, institutional ownership, analyst recommendations and valuation.

Analyst Ratings

This is a summary of current ratings and recommmendations for Middleburg Financial Corp. and Horizon Bancorp (IN), as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Middleburg Financial Corp. 0 0 0 0 N/A
Horizon Bancorp (IN) 0 0 3 0 3.00

Horizon Bancorp (IN) has a consensus price target of $29.33, suggesting a potential upside of 1.39%. Given Horizon Bancorp (IN)’s higher possible upside, analysts plainly believe Horizon Bancorp (IN) is more favorable than Middleburg Financial Corp..

Dividends

Middleburg Financial Corp. pays an annual dividend of $0.52 per share and has a dividend yield of 1.3%. Horizon Bancorp (IN) pays an annual dividend of $0.52 per share and has a dividend yield of 1.8%. Middleburg Financial Corp. pays out 46.0% of its earnings in the form of a dividend. Horizon Bancorp (IN) pays out 39.1% 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. Horizon Bancorp (IN) is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares Middleburg Financial Corp. and Horizon Bancorp (IN)’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Middleburg Financial Corp. N/A N/A N/A $1.13 34.26
Horizon Bancorp (IN) $132.76 million 4.83 $29.49 million $1.33 21.75

Horizon Bancorp (IN) has higher revenue and earnings than Middleburg Financial Corp.. Horizon Bancorp (IN) is trading at a lower price-to-earnings ratio than Middleburg Financial Corp., indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Middleburg Financial Corp. and Horizon Bancorp (IN)’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Middleburg Financial Corp. 8.07% 3.43% 0.34%
Horizon Bancorp (IN) 19.16% 9.65% 1.04%

Volatility and Risk

Middleburg Financial Corp. has a beta of 0.55, indicating that its stock price is 45% less volatile than the S&P 500. Comparatively, Horizon Bancorp (IN) has a beta of 1, indicating that its stock price has a similar volatility profile to the S&P 500.

Institutional & Insider Ownership

29.1% of Middleburg Financial Corp. shares are held by institutional investors. Comparatively, 45.1% of Horizon Bancorp (IN) shares are held by institutional investors. 5.1% of Middleburg Financial Corp. shares are held by company insiders. Comparatively, 5.4% of Horizon Bancorp (IN) shares are held by company 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

Horizon Bancorp (IN) beats Middleburg Financial Corp. on 12 of the 12 factors compared between the two stocks.

Middleburg Financial Corp. Company Profile

Middleburg Financial Corporation is a bank holding company. The Company conducts its primary operations through two subsidiaries, Middleburg Bank and Middleburg Investment Group, Inc. The Company has another subsidiary, MFC Capital Trust II. The Company’s segments are Commercial & Retail Banking, which includes loans, investment securities and deposit accounts; Wealth Management, including wealth management activities, and Mortgage Banking, which includes mortgage banking activities. The Company, through its subsidiaries, offers a range of banking, fiduciary and investment management services to both individuals and small businesses. The Company’s business activities include commercial and retail banking services through Middleburg Bank, wealth management services through Middleburg Investment Group, Inc., and mortgage banking services. Other banking services available to its clients include Internet banking, travelers’ checks, safe deposit rentals, notary public and wire services.

Horizon Bancorp (IN) Company Profile

Horizon Bancorp is a bank holding company. The Company provides a range of banking services in Northern and Central Indiana and Southwestern and Central Michigan through its bank subsidiary, Horizon Bank, N.A. (the Bank) and other affiliated entities and Horizon Risk Management, Inc. The Company operates through commercial banking segment. The Bank is a full-service commercial bank offering commercial and retail banking services, corporate and individual trust and agency services and other services incident to banking. Horizon Risk Management, Inc. is a captive insurance company. LSB Risk Management, Inc. is a captive insurance company. As of September 1, 2017, the Bank operated through 60 offices throughout northern and central Indiana and southern Michigan and Ohio. The Bank’s loan portfolio consists of commercial loans, real estate loans, mortgage warehouse loans and consumer loans.

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