Independent Bank Group (NASDAQ: IBTX) and Columbia Banking System (NASDAQ:COLB) are both financials companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, dividends, profitability, risk, earnings, analyst recommendations and institutional ownership.
Insider & Institutional Ownership
47.7% of Independent Bank Group shares are owned by institutional investors. Comparatively, 76.2% of Columbia Banking System shares are owned by institutional investors. 7.7% of Independent Bank Group shares are owned by insiders. Comparatively, 1.2% of Columbia Banking System shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
This is a breakdown of current recommendations and price targets for Independent Bank Group and Columbia Banking System, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Independent Bank Group||0||1||5||0||2.83|
|Columbia Banking System||0||2||2||0||2.50|
Independent Bank Group currently has a consensus target price of $72.00, indicating a potential upside of 3.00%. Columbia Banking System has a consensus target price of $46.75, indicating a potential upside of 4.94%. Given Columbia Banking System’s higher probable upside, analysts clearly believe Columbia Banking System is more favorable than Independent Bank Group.
This table compares Independent Bank Group and Columbia Banking System’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Independent Bank Group||23.46%||8.11%||1.08%|
|Columbia Banking System||27.72%||9.93%||1.33%|
Valuation & Earnings
This table compares Independent Bank Group and Columbia Banking System’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Independent Bank Group||$229.60 million||8.59||$53.54 million||$2.91||24.02|
|Columbia Banking System||$426.05 million||7.64||$104.86 million||$2.19||20.34|
Columbia Banking System has higher revenue and earnings than Independent Bank Group. Columbia Banking System is trading at a lower price-to-earnings ratio than Independent Bank Group, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Independent Bank Group has a beta of 1.31, suggesting that its stock price is 31% more volatile than the S&P 500. Comparatively, Columbia Banking System has a beta of 1.25, suggesting that its stock price is 25% more volatile than the S&P 500.
Independent Bank Group pays an annual dividend of $0.40 per share and has a dividend yield of 0.6%. Columbia Banking System pays an annual dividend of $0.88 per share and has a dividend yield of 2.0%. Independent Bank Group pays out 13.7% of its earnings in the form of a dividend. Columbia Banking System pays out 40.2% 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 Group Company Profile
Independent Bank Group, Inc. is a bank holding company. Through the Company’s subsidiary, Independent Bank (the Bank), the Company provides a range of commercial banking products and services tailored to meet the needs of businesses, professionals and individuals. As of December 31, 2016, the Company operated 41 banking offices in the Dallas/North Texas area, the Austin/Central Texas area, and the Houston metropolitan area. The Company offers residential mortgages through its mortgage brokerage division. As a mortgage broker, the Company originates residential mortgages, which are sold into the secondary market shortly after closing. The Company also provides wealth management services to its customers, including investment advisory and other related services. The Company offers a range of commercial and retail lending products to businesses, professionals and individuals. Deposits are the Company’s principal source of funds for use in lending and other general banking purposes.
Columbia Banking System Company Profile
Columbia Banking System, Inc. (Columbia) is a bank holding company for Columbia State Bank (the Bank) and Columbia Trust Company (Columbia Trust). The Company provides a range of banking services to small and medium-sized businesses, professionals and individuals. It offers products and services, which include Personal Banking, Business Banking and Wealth Management. Its Personal Banking products and services include Checking and Saving Accounts; Consumer Lending; Digital Banking; Residential Lending, and VISA Card Services. Its Business Banking products and services include Agricultural Lending; Commercial and Industrial Lending; International Banking; Merchant Card Services; Municipal Lending; Real Estate and Real Estate Construction Lending; Remote Deposit Capture; Small Business Administration (SBA) Lending; Small Business Services, and Treasury Management. Its Wealth Management products and services include Investment Services, Private Banking and Professional Banking.
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