Financial Contrast: Independent Bank (NASDAQ:INDB) vs. NB Bancorp (NASDAQ:NBBK)

NB Bancorp (NASDAQ:NBBK) and Independent Bank (NASDAQ:INDB) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, valuation, profitability, analyst recommendations, earnings, institutional ownership and dividends.

Institutional & Insider Ownership

83.4% of Independent Bank shares are held by institutional investors. 5.1% of NB Bancorp shares are held by company insiders. Comparatively, 1.6% of Independent Bank shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and recommmendations for NB Bancorp and Independent Bank, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NB Bancorp	0	2	2	0	2.50
Independent Bank	1	0	4	2	3.00

NB Bancorp currently has a consensus price target of $25.50, suggesting a potential upside of 10.82%. Independent Bank has a consensus price target of $91.86, suggesting a potential upside of 9.75%. Given NB Bancorp’s higher probable upside, research analysts clearly believe NB Bancorp is more favorable than Independent Bank.

Earnings & Valuation

This table compares NB Bancorp and Independent Bank”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NB Bancorp	$351.74 million	2.87	$50.30 million	$1.66	13.86
Independent Bank	$1.17 billion	3.39	$205.12 million	$6.75	12.40

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

Profitability

This table compares NB Bancorp and Independent Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NB Bancorp	14.86%	9.75%	1.14%
Independent Bank	24.27%	9.61%	1.36%

Dividends

NB Bancorp pays an annual dividend of $0.28 per share and has a dividend yield of 1.2%. Independent Bank pays an annual dividend of $2.56 per share and has a dividend yield of 3.1%. NB Bancorp pays out 16.9% of its earnings in the form of a dividend. Independent Bank pays out 37.9% 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. Independent Bank has increased its dividend for 15 consecutive years. Independent Bank is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Independent Bank beats NB Bancorp on 12 of the 17 factors compared between the two stocks.

About NB Bancorp

NB Bancorp, Inc. focuses on operating as a bank holding company for Needham Bank that provides various banking products and services in Greater Boston metropolitan area and surrounding communities in Massachusetts, eastern Connecticut, southern New Hampshire, and Rhode Island. The company offers various deposits, including certificate of deposit, individual retirement, money market, savings, NOW, demand deposit, and interest-bearing and noninterest-bearing checking accounts; and commercial real estate and multifamily, one- to four-family residential real estate, construction and land development, commercial and industrial, and consumer loans, as well as home equity loans and lines of credit. It also invests in securities consisting of U.S. treasury and federal agency securities, government-sponsored residential mortgage-backed securities, municipal bonds, and corporate bonds. The company was founded in 1892 and is based in Needham, Massachusetts.

About Independent Bank

Independent Bank Corp. operates as the bank holding company for Rockland Trust Company that provides commercial banking products and services to individuals and small-to-medium sized businesses in the United States. The company provides interest checking, money market, and savings accounts, as well as demand deposits and time certificates of deposit. It offers commercial real estate and construction, commercial and industrial, small business, secured and unsecured commercial, and consumer real estate loans; term loans and revolving/nonrevolving lines of credit; overdraft protection and letters of credit; and residential mortgages and home equity loans and lines. In addition, the company provides cash management services, such as ACH transaction processing, positive pay, and remote deposit services; investment management and trust services to individuals, institutions, small businesses, and charitable institutions; mobile, online, and telephone banking; estate settlement, financial planning, tax services, and other services; automated teller machines; debit and credit cards; and mutual fund and unit investment trust shares, third party model portfolios, general securities, fixed and variable annuities, and life insurance products, as well as advisory platforms. Further, it invests in low-income housing tax credit projects; holds, maintains, and disposes foreclosed properties; and operates as an investment advisor. Independent Bank Corp. was founded in 1907 and is headquartered in Rockland, Massachusetts.