German American Bancorp (NASDAQ:GABC) and 1st Source (NASDAQ:SRCE) Financial Contrast

1st Source (NASDAQ:SRCE) and German American Bancorp (NASDAQ:GABC) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, dividends, risk, analyst recommendations, institutional ownership, valuation and earnings.

Analyst Ratings

This is a breakdown of current recommendations and price targets for 1st Source and German American Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
1st Source	0	3	2	0	2.40
German American Bancorp	0	3	0	0	2.00

1st Source currently has a consensus price target of $72.67, suggesting a potential upside of 12.95%. German American Bancorp has a consensus price target of $45.50, suggesting a potential upside of 13.09%. Given German American Bancorp’s higher probable upside, analysts clearly believe German American Bancorp is more favorable than 1st Source.

Risk and Volatility

1st Source has a beta of 0.66, suggesting that its stock price is 34% less volatile than the S&P 500. Comparatively, German American Bancorp has a beta of 0.67, suggesting that its stock price is 33% less volatile than the S&P 500.

Dividends

1st Source pays an annual dividend of $1.60 per share and has a dividend yield of 2.5%. German American Bancorp pays an annual dividend of $1.16 per share and has a dividend yield of 2.9%. 1st Source pays out 26.6% of its earnings in the form of a dividend. German American Bancorp pays out 40.6% 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. 1st Source has raised its dividend for 38 consecutive years and German American Bancorp has raised its dividend for 13 consecutive years.

Institutional and Insider Ownership

74.4% of 1st Source shares are held by institutional investors. Comparatively, 46.9% of German American Bancorp shares are held by institutional investors. 19.5% of 1st Source shares are held by company insiders. Comparatively, 6.2% of German American Bancorp shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Valuation & Earnings

This table compares 1st Source and German American Bancorp”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
1st Source	$420.79 million	3.74	$132.62 million	$6.01	10.70
German American Bancorp	$330.60 million	4.56	$83.81 million	$2.86	14.07

1st Source has higher revenue and earnings than German American Bancorp. 1st Source is trading at a lower price-to-earnings ratio than German American Bancorp, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares 1st Source and German American Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
1st Source	24.97%	12.25%	1.68%
German American Bancorp	22.19%	11.85%	1.49%

Summary

1st Source beats German American Bancorp on 12 of the 17 factors compared between the two stocks.

About 1st Source

1st Source Corporation operates as the bank holding company for 1st Source Bank that provides commercial and consumer banking services, trust and wealth advisory services, and insurance products to individual and business clients. Its consumer banking services include checking and savings accounts; certificates of deposit; individual retirement accounts; online and mobile banking products; consumer loans, real estate mortgage loans, and home equity lines of credit; and financial planning, financial literacy, and other consultative services, as well as debit and credit cards. The company also offers commercial, small business, agricultural, and real estate loans for general corporate purposes, including financing for industrial and commercial properties, equipment, inventories, accounts receivables, and renewable energy and acquisition financing; and commercial leasing, treasury management, and retirement planning services. In addition, it provides trust, investment, agency, and custodial services comprising administration of estates and personal trusts, as well as management of investment accounts for individuals, employee benefit plans, and charitable foundations. Further, the company offers equipment loan and lease products for construction equipment, new and pre-owned aircraft, auto and light trucks, and medium and heavy duty trucks; and finances construction equipment, aircrafts, medium and heavy duty trucks, step vans, vocational work trucks, motor coaches, shuttle buses, funeral cars, automobiles, and other equipment. Additionally, it provides corporate and personal property, casualty, and individual and group health and life insurance products and services. 1st Source Corporation was founded in 1863 and is headquartered in South Bend, Indiana.

About German American Bancorp

German American Bancorp, Inc. operates as a financial holding company for German American Bank that provides retail and commercial banking services. The company operates through three segments: Core Banking, Wealth Management Services, and Insurance Operations. The Core Banking segment accepts deposits from the general public; and originates consumer, commercial and agricultural, commercial and agricultural real estate, and residential mortgage loans, as well as sells residential mortgage loans in the secondary market. The Wealth Management segment provides trust, investment advisory, brokerage, and retirement planning services. The Insurance Operations segment offers a range of personal and corporate property and casualty insurance products. It also offers checking, saving, and individual retirement accounts; certificates of deposit; wire transfer; credit cards; home equity, mortgages, and small business; treasury management; and online and mobile banking, bill pay, digital wallet, mobile check deposit, credit score and report, money management, and estatements, as well as wealth advisory. German American Bancorp, Inc. was founded in 1910 and is based in Jasper, Indiana.