Reviewing Independent Bank (NASDAQ:IBCP) & International Bancshares (NASDAQ:IBOC)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
International Bancshares	39.64%	17.01%	2.67%
Independent Bank	21.11%	17.24%	1.31%

Institutional and Insider Ownership

65.9% of International Bancshares shares are owned by institutional investors. Comparatively, 79.4% of Independent Bank shares are owned by institutional investors. 13.9% of International Bancshares shares are owned by company insiders. Comparatively, 5.5% of Independent Bank shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings & Valuation

This table compares International Bancshares and Independent Bank’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
International Bancshares	$837.34 million	4.45	$411.77 million	$6.55	9.16
Independent Bank	$207.12 million	3.26	$59.07 million	$2.94	11.00

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

Risk and Volatility

International Bancshares has a beta of 0.89, suggesting that its share price is 11% less volatile than the S&P 500. Comparatively, Independent Bank has a beta of 1.01, suggesting that its share price is 1% more volatile than the S&P 500.

Dividends

International Bancshares pays an annual dividend of $1.32 per share and has a dividend yield of 2.2%. Independent Bank pays an annual dividend of $0.96 per share and has a dividend yield of 3.0%. International Bancshares pays out 20.2% of its earnings in the form of a dividend. Independent Bank pays out 32.7% 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. International Bancshares has increased its dividend for 15 consecutive years.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for International Bancshares and Independent Bank, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
International Bancshares	0	0	0	0	N/A
Independent Bank	0	4	0	0	2.00

Independent Bank has a consensus target price of $32.17, suggesting a potential downside of 0.54%. Given Independent Bank’s higher possible upside, analysts plainly believe Independent Bank is more favorable than International Bancshares.

Summary

International Bancshares beats Independent Bank on 9 of the 15 factors compared between the two stocks.

About International Bancshares

International Bancshares Corporation, a financial holding company, provides commercial and retail banking services in Texas and the State of Oklahoma. It accepts checking and saving deposits; and offers commercial, real estate, personal, home improvement, automobile, and other installment and term loans. The company also provides international banking services, including letters of credit, commercial and industrial loans, and foreign exchange services. In addition, it offers other banking related services, such as credit cards, safety deposit boxes, collection, notary public, escrow, drive up and walk up facilities, and other customary banking services; and Internet banking services, as well as securities products through third party providers. The company was founded in 1966 and is headquartered in Laredo, Texas.

About Independent Bank

Independent Bank Corporation operates as the bank holding company for Independent Bank that provides commercial banking services to individuals and businesses in rural and suburban communities in Michigan. It offers checking and savings accounts, commercial lending, direct and indirect consumer financing, mortgage lending, and safe deposit box services. The company also provides title insurance services and investment services, as well as automatic teller machines, and internet and mobile banking services. In addition, it operates through branches, drive-thru facilities, and loan production offices. Independent Bank Corporation was founded in 1864 and is based in Grand Rapids, Michigan.