Financial Analysis: Banco Bradesco (BBD) versus Independent Bank Co.(MI) (IBCP)
Banco Bradesco (NYSE: BBD) and Independent Bank Co.(MI) (NASDAQ:IBCP) are both financials companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, dividends, analyst recommendations, profitability, valuation and risk.
This is a summary of recent recommendations and price targets for Banco Bradesco and Independent Bank Co.(MI), as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Independent Bank Co.(MI)||0||3||0||0||2.00|
Institutional and Insider Ownership
2.7% of Banco Bradesco shares are held by institutional investors. Comparatively, 81.7% of Independent Bank Co.(MI) shares are held by institutional investors. 5.7% of Independent Bank Co.(MI) shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Risk and Volatility
Banco Bradesco has a beta of 1.75, meaning that its share price is 75% more volatile than the S&P 500. Comparatively, Independent Bank Co.(MI) has a beta of 0.7, meaning that its share price is 30% less volatile than the S&P 500.
Valuation and Earnings
This table compares Banco Bradesco and Independent Bank Co.(MI)’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Banco Bradesco||$46.77 billion||1.42||$4.32 billion||$0.90||11.06|
|Independent Bank Co.(MI)||$128.82 million||3.71||$22.76 million||$1.14||19.65|
Banco Bradesco has higher revenue and earnings than Independent Bank Co.(MI). Banco Bradesco is trading at a lower price-to-earnings ratio than Independent Bank Co.(MI), indicating that it is currently the more affordable of the two stocks.
This table compares Banco Bradesco and Independent Bank Co.(MI)’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Independent Bank Co.(MI)||17.75%||9.52%||0.93%|
Banco Bradesco pays an annual dividend of $0.06 per share and has a dividend yield of 0.6%. Independent Bank Co.(MI) pays an annual dividend of $0.48 per share and has a dividend yield of 2.1%. Banco Bradesco pays out 6.7% of its earnings in the form of a dividend. Independent Bank Co.(MI) pays out 42.1% 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. Banco Bradesco has increased its dividend for 3 consecutive years.
Banco Bradesco beats Independent Bank Co.(MI) on 10 of the 17 factors compared between the two stocks.
Banco Bradesco Company Profile
Banco Bradesco S.A. is a commercial bank. The Bank offers a range of banking and financial products and services in Brazil and abroad to individuals, large, mid-sized and small companies, and local and international corporations and institutions. Its segments include Financial; Insurance and Capitalization bonds; Pension plans, and Other Activities. The Financial segment consists of financial institutions and holding companies, which are responsible for managing financial resources, and credit card, consortium and asset management companies. The Insurance Group segment comprises insurance, pension plan and capitalization bond companies. It offers banking services, including deposit-taking activities, individual and corporate banking services, credit and debit cards, leasing operations, investment banking, asset management, consortium services and others. Its insurance services include health insurance, life and personal accident insurance, automobile, casualty and pension plans.
Independent Bank Co.(MI) Company Profile
Independent Bank Corporation is a bank holding company. The Company owns all of the outstanding stock of Independent Bank (the Bank). The Bank focuses on commercial banking industry. The Bank offers a range of banking services to individuals and businesses, including checking and savings accounts, commercial lending, direct and indirect consumer financing, mortgage lending and safe deposit box services. The Company’s principal markets are the rural and suburban communities across lower Michigan. As of December 31, 2016, the Company’s markets were served by the Bank’s main office in Grand Rapids, Michigan, and a total of 62 branches, a drive-in facility and 12 loan production offices. The Bank’s branches provide lobby and drive-in services, as well as automatic teller machines (ATMs). Its Bank also offers title insurance services through a subsidiary, and investment and insurance services through a third party agreement with Cetera Investment Services LLC.
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