First Internet Bancorp (NASDAQ: INBK) and Enterprise Bancorp (NASDAQ:EBTC) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, profitability, valuation, analyst recommendations, institutional ownership, earnings and risk.
First Internet Bancorp pays an annual dividend of $0.24 per share and has a dividend yield of 0.6%. Enterprise Bancorp pays an annual dividend of $0.58 per share and has a dividend yield of 1.7%. First Internet Bancorp pays out 11.1% of its earnings in the form of a dividend. Enterprise Bancorp pays out 34.9% 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.
This table compares First Internet Bancorp and Enterprise Bancorp’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|First Internet Bancorp||15.99%||9.45%||0.72%|
This is a breakdown of current recommendations for First Internet Bancorp and Enterprise Bancorp, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|First Internet Bancorp||0||1||3||0||2.75|
First Internet Bancorp currently has a consensus price target of $44.33, suggesting a potential upside of 15.15%. Given First Internet Bancorp’s higher probable upside, research analysts plainly believe First Internet Bancorp is more favorable than Enterprise Bancorp.
Volatility & Risk
First Internet Bancorp has a beta of -0.02, meaning that its stock price is 102% less volatile than the S&P 500. Comparatively, Enterprise Bancorp has a beta of 0.93, meaning that its stock price is 7% less volatile than the S&P 500.
Institutional & Insider Ownership
68.7% of First Internet Bancorp shares are held by institutional investors. Comparatively, 20.6% of Enterprise Bancorp shares are held by institutional investors. 7.6% of First Internet Bancorp shares are held by insiders. Comparatively, 19.7% of Enterprise Bancorp shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Earnings and Valuation
This table compares First Internet Bancorp and Enterprise Bancorp’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|First Internet Bancorp||$95.24 million||3.40||$15.23 million||$2.16||17.82|
|Enterprise Bancorp||$120.71 million||3.36||$19.39 million||$1.66||21.02|
Enterprise Bancorp has higher revenue and earnings than First Internet Bancorp. First Internet Bancorp is trading at a lower price-to-earnings ratio than Enterprise Bancorp, indicating that it is currently the more affordable of the two stocks.
Enterprise Bancorp beats First Internet Bancorp on 9 of the 15 factors compared between the two stocks.
About First Internet Bancorp
First Internet Bancorp is a bank holding company that conducts its business activities through its subsidiary, First Internet Bank of Indiana (the Bank). The Company offers a complement of products and services on a nationwide basis. The Company conducts its deposit operations primarily over the Internet. The Company also offers commercial real estate (CRE) lending, including nationwide single tenant lease financing and commercial and industrial (C&I) lending, including business banking/treasury management services. The Bank provides commercial and retail banking services, with operations conducted on the Internet at www.firstib.com. It offers residential real estate loans, home equity loans and lines of credit, and consumer loans, and loans to commercial clients, which include commercial loans, commercial real estate loans, letters of credit and single tenant lease financing. The Bank’s subsidiary, JKH Realty Services, LLC manages real estate owned properties.
About Enterprise Bancorp
Enterprise Bancorp, Inc. operates as the holding company of Enterprise Bank and Trust Company (the Bank). The Company is engaged in the business of gathering deposits from the general public and investing primarily in loans and investment securities and utilizing the resulting cash flows to conduct operations, expand the branch network, and pay dividends to stockholders. Through the Bank and its subsidiaries, the Company offers a range of commercial and consumer loan products, deposit products and cash management services. The Company also offers investment advisory and wealth management, trust and insurance services. The Company offers lending services to business entities, non-profit organizations, professionals and individuals. Loans made to businesses include commercial mortgage loans; construction and land development loans; secured and unsecured commercial loans; lines of credit, and standby letters of credit.
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