Contrasting Equity BancShares (EQBK) and Horizon Bancorp (HBNC)

Equity BancShares (NASDAQ: EQBK) and Horizon Bancorp (NASDAQ:HBNC) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, profitability, risk, valuation, institutional ownership, dividends and earnings.

Volatility & Risk

Equity BancShares has a beta of 0.61, indicating that its stock price is 39% less volatile than the S&P 500. Comparatively, Horizon Bancorp has a beta of 1.09, indicating that its stock price is 9% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Equity BancShares and Horizon Bancorp, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Equity BancShares 0 1 2 0 2.67
Horizon Bancorp 0 1 1 0 2.50

Equity BancShares presently has a consensus target price of $35.33, indicating a potential downside of 12.52%. Horizon Bancorp has a consensus target price of $32.25, indicating a potential upside of 0.72%. Given Horizon Bancorp’s higher probable upside, analysts plainly believe Horizon Bancorp is more favorable than Equity BancShares.

Earnings and Valuation

This table compares Equity BancShares and Horizon Bancorp’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Equity BancShares $118.13 million 4.99 $20.64 million $1.98 20.40
Horizon Bancorp $161.62 million 5.06 $33.11 million $1.53 20.93

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

Profitability

This table compares Equity BancShares and Horizon Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Equity BancShares 18.85% 8.69% 1.04%
Horizon Bancorp 21.79% 9.53% 1.08%

Dividends

Horizon Bancorp pays an annual dividend of $0.60 per share and has a dividend yield of 1.9%. Equity BancShares does not pay a dividend. Horizon Bancorp pays out 39.2% of its earnings in the form of a dividend.

Institutional and Insider Ownership

63.0% of Equity BancShares shares are owned by institutional investors. Comparatively, 51.6% of Horizon Bancorp shares are owned by institutional investors. 12.2% of Equity BancShares shares are owned by company insiders. Comparatively, 4.6% of Horizon Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

Horizon Bancorp beats Equity BancShares on 10 of the 16 factors compared between the two stocks.

About Equity BancShares

Equity Bancshares, Inc. operates as a bank holding company for Equity Bank that provides a range of financial services primarily to businesses, business owners, and individuals. The company accepts various deposit products, including demand, savings, money market, and time deposits. Its loan products include commercial and industrial, commercial real estate-backed, commercial lines of credit, working capital, term, equipment financing, acquisition, expansion and development, borrowing base, real estate construction loans, homebuilder, agricultural, government guaranteed, and other loans, as well as letters of credit to national and regional companies, restaurant franchisees, hoteliers, real estate developers, manufacturing and industrial companies, agribusiness companies, and other businesses. The company's loan products also comprise various consumer loans to individuals and professionals, including residential real estate loans, home equity loans, home equity lines of credit, installment loans, unsecured and secured personal lines of credit, overdraft protection, and letters of credit. It also provides debit cards; online banking solutions, such as access to account balances, online transfers, online bill payment, and electronic delivery of customer statements; mobile banking solutions comprising remote check deposits with mobile bill pay; ATMs; and treasury management, wire transfer, and automated clearing house and stop payment services. In addition, the company offers cash management deposit products, such as lockbox, remote deposit capture, positive pay, reverse positive pay, account reconciliation services, zero balance accounts, and sweep accounts, as well as banking services through telephone, mail, and personal appointments. As of February 22, 2018, it operated 42 full-service branches located in Kansas, Missouri, Arkansas, and Oklahoma. Equity Bancshares, Inc. was founded in 2002 and is headquartered in Wichita, Kansas.

About Horizon Bancorp

Horizon Bancorp operates as the bank holding company for Horizon Bank that provides commercial and retail banking services. The company offers non-interest bearing and interest-bearing demand deposits, savings accounts, money market deposits, and time deposits. Its loan portfolio comprises commercial, financial, agricultural, and commercial tax-exempt loans; and real estate, mortgage warehouse, and consumer loans. The company also provides corporate and individual trust and agency, investment management, and real estate investment trust services; and sells various insurance products. It operates through a network of 62 full service offices in Northern and Central Indiana, as well as Southern, Central, and Great Lakes bay regions of Michigan. Horizon Bancorp was founded in 1873 and is headquartered in Michigan City, Indiana.

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