Independent Bank (NASDAQ:INDB) and Esquire Financial (NASDAQ:ESQ) Critical Review

Independent Bank (NASDAQ:INDB) and Esquire Financial (NASDAQ:ESQ) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their risk, earnings, profitability, dividends, valuation, analyst recommendations and institutional ownership.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Independent Bank and Esquire Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Independent Bank	1	2	4	1	2.63
Esquire Financial	0	1	2	1	3.00

Independent Bank presently has a consensus target price of $90.71, indicating a potential upside of 10.56%. Esquire Financial has a consensus target price of $120.33, indicating a potential upside of 6.07%. Given Independent Bank’s higher probable upside, equities research analysts clearly believe Independent Bank is more favorable than Esquire Financial.

Profitability

This table compares Independent Bank and Esquire Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Independent Bank	19.14%	8.66%	1.26%
Esquire Financial	29.96%	18.30%	2.30%

Insider & Institutional Ownership

83.4% of Independent Bank shares are held by institutional investors. Comparatively, 54.7% of Esquire Financial shares are held by institutional investors. 1.6% of Independent Bank shares are held by insiders. Comparatively, 13.9% of Esquire Financial shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Dividends

Independent Bank pays an annual dividend of $2.56 per share and has a dividend yield of 3.1%. Esquire Financial pays an annual dividend of $0.80 per share and has a dividend yield of 0.7%. Independent Bank pays out 50.8% of its earnings in the form of a dividend. Esquire Financial pays out 13.4% 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. Independent Bank has increased its dividend for 15 consecutive years and Esquire Financial has increased its dividend for 4 consecutive years. Independent Bank is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Independent Bank and Esquire Financial”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Independent Bank	$1.17 billion	3.39	$205.12 million	$5.04	16.28
Esquire Financial	$164.50 million	5.96	$50.82 million	$5.95	19.07

Independent Bank has higher revenue and earnings than Esquire Financial. Independent Bank is trading at a lower price-to-earnings ratio than Esquire Financial, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Independent Bank has a beta of 0.78, meaning that its share price is 22% less volatile than the S&P 500. Comparatively, Esquire Financial has a beta of 0.39, meaning that its share price is 61% less volatile than the S&P 500.

Summary

Esquire Financial beats Independent Bank on 9 of the 17 factors compared between the two stocks.

About Independent Bank

Independent Bank Corp. operates as the bank holding company for Rockland Trust Company that provides commercial banking products and services to individuals and small-to-medium sized businesses in the United States. The company provides interest checking, money market, and savings accounts, as well as demand deposits and time certificates of deposit. It offers commercial real estate and construction, commercial and industrial, small business, secured and unsecured commercial, and consumer real estate loans; term loans and revolving/nonrevolving lines of credit; overdraft protection and letters of credit; and residential mortgages and home equity loans and lines. In addition, the company provides cash management services, such as ACH transaction processing, positive pay, and remote deposit services; investment management and trust services to individuals, institutions, small businesses, and charitable institutions; mobile, online, and telephone banking; estate settlement, financial planning, tax services, and other services; automated teller machines; debit and credit cards; and mutual fund and unit investment trust shares, third party model portfolios, general securities, fixed and variable annuities, and life insurance products, as well as advisory platforms. Further, it invests in low-income housing tax credit projects; holds, maintains, and disposes foreclosed properties; and operates as an investment advisor. Independent Bank Corp. was founded in 1907 and is headquartered in Rockland, Massachusetts.

About Esquire Financial

Esquire Financial Holdings, Inc. operates as the bank holding company for Esquire Bank, National Association that provides commercial banking products and services to legal industry and small businesses, and commercial and retail customers in the United States. The company offers checking, savings, money market, and time deposits, as well as certificates of deposit. It also provides commercial loans, such as short-term financing for inventory, receivables, the purchase of supplies, or other operating needs arising during the normal course of business, as well as loans to its qualified ISO customers; commercial lines of credit; consumer loans consisting of post-settlement consumer and structured settlement loans to plaintiffs and claimants, as well as loans to individuals for debt consolidation, medical expenses, living expenses, payment of outstanding bills, or other consumer needs; and real estate loans, such as multifamily, 1-4 family residential, commercial real estate, and construction loans, as well as merchant services. In addition, it offers cash management, cash sweep, online and mobile banking, individual retirement accounts, and working capital lines of credit. Esquire Financial Holdings, Inc. was founded in 2006 and is headquartered in Jericho, New York.