Richmond Mutual Bancorporation (NASDAQ:RMBI) & Horizon Bancorp (IN) (NASDAQ:HBNC) Critical Analysis

Richmond Mutual Bancorporation (NASDAQ:RMBI) and Horizon Bancorp (IN) (NASDAQ:HBNC) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, institutional ownership, dividends, analyst recommendations, valuation and risk.

Insider and Institutional Ownership

26.5% of Richmond Mutual Bancorporation shares are held by institutional investors. Comparatively, 64.5% of Horizon Bancorp (IN) shares are held by institutional investors. 8.2% of Richmond Mutual Bancorporation shares are held by company insiders. Comparatively, 2.5% of Horizon Bancorp (IN) shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Richmond Mutual Bancorporation and Horizon Bancorp (IN)’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Richmond Mutual Bancorporation	12.73%	8.61%	0.76%
Horizon Bancorp (IN)	-37.12%	11.56%	1.17%

Dividends

Richmond Mutual Bancorporation pays an annual dividend of $0.60 per share and has a dividend yield of 4.2%. Horizon Bancorp (IN) pays an annual dividend of $0.64 per share and has a dividend yield of 3.6%. Richmond Mutual Bancorporation pays out 51.3% of its earnings in the form of a dividend. Horizon Bancorp (IN) pays out -20.3% 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. Richmond Mutual Bancorporation has raised its dividend for 1 consecutive years. Richmond Mutual Bancorporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of current recommendations and price targets for Richmond Mutual Bancorporation and Horizon Bancorp (IN), as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Richmond Mutual Bancorporation	0	0	1	0	3.00
Horizon Bancorp (IN)	1	2	2	0	2.20

Horizon Bancorp (IN) has a consensus target price of $20.33, indicating a potential upside of 15.79%. Given Horizon Bancorp (IN)’s higher possible upside, analysts clearly believe Horizon Bancorp (IN) is more favorable than Richmond Mutual Bancorporation.

Risk & Volatility

Richmond Mutual Bancorporation has a beta of 0.3, indicating that its share price is 70% less volatile than the S&P 500. Comparatively, Horizon Bancorp (IN) has a beta of 0.82, indicating that its share price is 18% less volatile than the S&P 500.

Valuation and Earnings

This table compares Richmond Mutual Bancorporation and Horizon Bancorp (IN)”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Richmond Mutual Bancorporation	$48.91 million	3.02	$11.58 million	$1.17	12.09
Horizon Bancorp (IN)	$405.46 million	2.22	-$150.48 million	($3.15)	-5.57

Richmond Mutual Bancorporation has higher earnings, but lower revenue than Horizon Bancorp (IN). Horizon Bancorp (IN) is trading at a lower price-to-earnings ratio than Richmond Mutual Bancorporation, indicating that it is currently the more affordable of the two stocks.

Summary

Richmond Mutual Bancorporation beats Horizon Bancorp (IN) on 9 of the 17 factors compared between the two stocks.

About Richmond Mutual Bancorporation

Richmond Mutual Bancorporation, Inc. operates as the bank holding company for First Bank Richmond that provides various banking services. It accepts various deposits, including savings deposit accounts, money market accounts, NOW and demand accounts, and certificates of deposit. The company also offers a range of lending products, such as multi-family and commercial real estate loans, commercial and industrial loans, construction and development loans, residential real estate loans, and consumer loans. In addition, it engages in the lease financing business; and provision of fee-based financial services comprising trust and estate administration, investment management, retirement plan administration, and private banking services. The company was founded in 1887 and is headquartered in Richmond, Indiana.

About Horizon Bancorp (IN)

Horizon Bancorp, Inc. operates as the bank holding company for Horizon Bank that engages in the provision of commercial and retail banking services. The company offers checking, saving, money market, certificate of deposits, individual retirement accounts, and time deposits, as well as non-interest- and interest-bearing demand deposits. It also provides commercial, residential real estate, mortgage, home equity, auto, personal, business, agricultural, and SBA loans, as well as credit cards. In addition, the company offers corporate and individual trust and agency, investment management, and real estate investment trust services; debit cards; treasury management; online and mobile banking; wealth, retirement, and estate and trust services; and sells various insurance products. It operates through full-service offices in northern and central Indiana and southern and central Michigan. Horizon Bancorp, Inc. was founded in 1873 and is headquartered in Michigan City, Indiana.