West Bancorporation (NASDAQ:WTBA) and First Bancorp of Indiana (OTCMKTS:FBPI) Critical Analysis

West Bancorporation (NASDAQ:WTBA) and First Bancorp of Indiana (OTCMKTS:FBPI) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their valuation, profitability, institutional ownership, risk, earnings, dividends and analyst recommendations.

Profitability

This table compares West Bancorporation and First Bancorp of Indiana’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
West Bancorporation	17.30%	14.88%	0.95%
First Bancorp of Indiana	N/A	N/A	N/A

Risk & Volatility

West Bancorporation has a beta of 0.75, suggesting that its stock price is 25% less volatile than the S&P 500. Comparatively, First Bancorp of Indiana has a beta of 0.14, suggesting that its stock price is 86% less volatile than the S&P 500.

Valuation & Earnings

This table compares West Bancorporation and First Bancorp of Indiana”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
West Bancorporation	$202.45 million	2.01	$32.56 million	$2.06	11.62
First Bancorp of Indiana	N/A	N/A	N/A	$0.21	67.14

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

Institutional and Insider Ownership

44.3% of West Bancorporation shares are held by institutional investors. 4.6% of West Bancorporation shares are held by company insiders. Comparatively, 20.0% of First Bancorp of Indiana 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.

Dividends

West Bancorporation pays an annual dividend of $1.00 per share and has a dividend yield of 4.2%. First Bancorp of Indiana pays an annual dividend of $0.28 per share and has a dividend yield of 2.0%. West Bancorporation pays out 48.5% of its earnings in the form of a dividend. First Bancorp of Indiana pays out 133.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. West Bancorporation is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for West Bancorporation and First Bancorp of Indiana, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
West Bancorporation	0	3	1	0	2.25
First Bancorp of Indiana	0	0	0	0	0.00

West Bancorporation currently has a consensus price target of $24.75, suggesting a potential upside of 3.38%. Given West Bancorporation’s stronger consensus rating and higher probable upside, equities analysts clearly believe West Bancorporation is more favorable than First Bancorp of Indiana.

Summary

West Bancorporation beats First Bancorp of Indiana on 12 of the 14 factors compared between the two stocks.

About West Bancorporation

West Bancorporation, Inc. operates as the financial holding company provides community banking and trust services to individuals and small- to medium-sized businesses in the United States. It offers deposit services, including checking, savings, and money market accounts, as well as time certificates of deposit. The company also provides loan products comprising commercial real estate loans, construction and land development loans, commercial lines of credit, and commercial term loans; consumer loans, including loans extended to individuals for household, family, and other personal expenditures not secured by real estate; and 1-4 family residential mortgages and home equity loans. In addition, it offers online and mobile banking, treasury management services including cash management, client-generated automated clearing house transactions, remote deposit, and fraud protection services; merchant credit card processing and corporate credit cards; and administration of estates, conservatorships, personal trusts, and agency accounts. The company was founded in 1893 and is headquartered in West Des Moines, Iowa.

About First Bancorp of Indiana

First Bancorp of Indiana, Inc. operates as the bank holding company for First Federal Savings Bank, provides various banking products and services to individuals and business customers in the United States. The company accepts various deposits such as certificates of deposit, checking, health savings, individual retirement, money market, and savings accounts; loans include retail loan advisors, consumer loans, such as auto, motorcycle, boat, and recreational vehicle loans; mortgage and home equity loans; and current rates and secured deposits. It also accepts various business deposit accounts including commercial, business, small business, and community first checking accounts; lending services comprising relationship bankers; commercial real estate, equipment, owner occupied and investment real estate financing, as well as working capital line of credit, business loans, and small business administration. In addition, the company provides treasury management, online banking, merchant services, remote capture, and debit and credit card services. First Bancorp of Indiana, Inc. was founded in 1904 and is headquartered in Evansville, Indiana.