Analyzing Business First Bancshares (NASDAQ:BFST) and First Internet Bancorp (NASDAQ:INBK)

Business First Bancshares (NASDAQ:BFST) and First Internet Bancorp (NASDAQ:INBK) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, risk, dividends, valuation, analyst recommendations, earnings and institutional ownership.

Analyst Ratings

This is a summary of recent ratings and price targets for Business First Bancshares and First Internet Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Business First Bancshares	0	1	4	0	2.80
First Internet Bancorp	2	2	1	0	1.80

Business First Bancshares currently has a consensus target price of $30.75, indicating a potential upside of 15.30%. First Internet Bancorp has a consensus target price of $24.33, indicating a potential upside of 23.08%. Given First Internet Bancorp’s higher probable upside, analysts plainly believe First Internet Bancorp is more favorable than Business First Bancshares.

Volatility and Risk

Business First Bancshares has a beta of 0.87, suggesting that its stock price is 13% less volatile than the S&P 500. Comparatively, First Internet Bancorp has a beta of 0.84, suggesting that its stock price is 16% less volatile than the S&P 500.

Dividends

Business First Bancshares pays an annual dividend of $0.60 per share and has a dividend yield of 2.2%. First Internet Bancorp pays an annual dividend of $0.24 per share and has a dividend yield of 1.2%. Business First Bancshares pays out 23.2% of its earnings in the form of a dividend. First Internet Bancorp pays out -6.3% 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. Business First Bancshares has raised its dividend for 2 consecutive years. Business First Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Business First Bancshares and First Internet Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Business First Bancshares	15.94%	11.08%	1.08%
First Internet Bancorp	-9.35%	-2.05%	-0.13%

Institutional & Insider Ownership

47.4% of Business First Bancshares shares are held by institutional investors. Comparatively, 65.5% of First Internet Bancorp shares are held by institutional investors. 6.5% of Business First Bancshares shares are held by insiders. Comparatively, 8.0% of First Internet Bancorp shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Business First Bancshares and First Internet Bancorp”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Business First Bancshares	$458.96 million	1.72	$65.11 million	$2.59	10.30
First Internet Bancorp	$339.23 million	0.51	$25.28 million	($3.80)	-5.20

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

Summary

Business First Bancshares beats First Internet Bancorp on 13 of the 17 factors compared between the two stocks.

About Business First Bancshares

Business First Bancshares, Inc. operates as the bank holding company for b1BANK that provides various banking products and services in Louisiana and Texas. It offers various deposit products and services, including checking, demand, money market, time, and savings accounts; and certificates of deposits, remote deposit capture, and direct deposit services. The company also provides commercial and industrial loans, such as working capital, term, equipment financing, asset acquisition, expansion and development, borrowing base, and other loan products, as well as commercial lines of credit, accounts receivable factoring, agricultural financing, and letters of credit; construction and development loans; commercial real estate loans; residential real estate loans comprising first and second lien 1-4 family mortgage loans, and home equity lines of credit; and consumer loans, including secured and unsecured installment, and term loans. In addition, it offers wealth management products, including mutual funds, annuities, individual retirement accounts, and other financial products, as well as other fiduciary and private banking products and services. Further, the company provides a range of other financial services comprising debit and credit cards, treasury and cash management, merchant, automated clearing house, lock-box, receivables factoring, correspondent banking, and other treasury services, as well as employee and payroll benefits solutions; and drive-through banking facilities, automated teller machines, night depository, personalized checks, electronic funds transfer, domestic and foreign wire transfer, traveler's checks, vault, loan and deposit sweep accounts, online and mobile banking, e-statements, and bank-by-mail services. Business First Bancshares, Inc. was founded in 2006 and is headquartered in Baton Rouge, Louisiana.

About First Internet Bancorp

First Internet Bancorp operates as the bank holding company for First Internet Bank of Indiana that provides commercial, small business, consumer, and municipal banking products and services to individuals and commercial customers in the United States. The company accepts non-interest bearing and interest-bearing demand deposit, commercial deposit, savings, money market, and Banking-as-a-Service brokered deposit accounts, as well as certificates of deposit. It also offers commercial and industrial, owner-occupied and investor commercial real estate, construction, residential mortgage, home equity, line of credit and home improvement, small installment, term, and other consumer loans, as well as single tenant lease financing, and public and healthcare finance; franchise finance; and small business lending. In addition, the company is involved in the purchase, manage, service, and safekeeping of municipal securities; and provision of public and municipal lending and leasing products to government entities. Further, the company offers corporate credit card and treasury management services. First Internet Bancorp was founded in 1998 and is headquartered in Fishers, Indiana.