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

Insider & Institutional Ownership

44.7% of Horizon Bancorp shares are owned by institutional investors. Comparatively, 22.8% of Summit Financial Group shares are owned by institutional investors. 5.4% of Horizon Bancorp shares are owned by company insiders. Comparatively, 22.8% of Summit Financial Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Volatility & Risk

Horizon Bancorp has a beta of 0.98, suggesting that its share price is 2% less volatile than the S&P 500. Comparatively, Summit Financial Group has a beta of 0.96, suggesting that its share price is 4% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and target prices for Horizon Bancorp and Summit Financial Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Horizon Bancorp 0 1 2 0 2.67
Summit Financial Group 0 2 0 0 2.00

Horizon Bancorp presently has a consensus price target of $31.17, indicating a potential upside of 3.24%. Summit Financial Group has a consensus price target of $26.50, indicating a potential upside of 2.08%. Given Horizon Bancorp’s stronger consensus rating and higher probable upside, equities analysts clearly believe Horizon Bancorp is more favorable than Summit Financial Group.

Earnings & Valuation

This table compares Horizon Bancorp and Summit Financial Group’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Horizon Bancorp $161.62 million 4.77 $33.12 million $1.44 20.97
Summit Financial Group $98.95 million 3.26 $11.91 million $0.95 27.33

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

Dividends

Horizon Bancorp pays an annual dividend of $0.52 per share and has a dividend yield of 1.7%. Summit Financial Group pays an annual dividend of $0.44 per share and has a dividend yield of 1.7%. Horizon Bancorp pays out 36.1% of its earnings in the form of a dividend. Summit Financial Group pays out 46.3% 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. Horizon Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Horizon Bancorp and Summit Financial Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Horizon Bancorp 20.49% 9.85% 1.08%
Summit Financial Group 12.04% 11.88% 1.09%

Summary

Horizon Bancorp beats Summit Financial Group on 12 of the 16 factors compared between the two stocks.

About Horizon Bancorp

Horizon Bancorp is a bank holding company. The Company provides a range of banking services in Northern and Central Indiana and Southwestern and Central Michigan through its bank subsidiary, Horizon Bank, N.A. (the Bank) and other affiliated entities and Horizon Risk Management, Inc. The Company operates through commercial banking segment. The Bank is a full-service commercial bank offering commercial and retail banking services, corporate and individual trust and agency services and other services incident to banking. Horizon Risk Management, Inc. is a captive insurance company. LSB Risk Management, Inc. is a captive insurance company. As of September 1, 2017, the Bank operated through 60 offices throughout northern and central Indiana and southern Michigan and Ohio. The Bank’s loan portfolio consists of commercial loans, real estate loans, mortgage warehouse loans and consumer loans.

About Summit Financial Group

Summit Financial Group, Inc. (Summit) is a financial holding company. The Company provides community banking services primarily in the Eastern Panhandle and South Central regions of West Virginia and the Shenandoah Valley, and Northern region of Virginia. The Company provides these services through its community bank subsidiary, Summit Community Bank (Summit Community or the Bank). The Company operates through two segments: community banking, and insurance & financial services. The community banking segment consists of its full service banks, which offer customers traditional banking products and services through various delivery channels. The insurance & financial services segment includes three insurance agency offices that sell insurance products. The Company also operates Summit Insurance Services, LLC in Moorefield, West Virginia and Leesburg, Virginia, which provides insurance brokerage services to individuals and businesses.

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