Regions Financial (NYSE:RF) versus Horizon Bancorp (IN) (NASDAQ:HBNC) Critical Survey

Horizon Bancorp (IN) (NASDAQ:HBNC) and Regions Financial (NYSE:RF) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitability, dividends, risk, institutional ownership, earnings and analyst recommendations.

Insider and Institutional Ownership

64.5% of Horizon Bancorp (IN) shares are owned by institutional investors. Comparatively, 79.4% of Regions Financial shares are owned by institutional investors. 1.2% of Horizon Bancorp (IN) shares are owned by company insiders. Comparatively, 0.3% of Regions Financial shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Horizon Bancorp (IN)	$405.46 million	2.62	-$150.48 million	$2.09	9.90
Regions Financial	$9.61 billion	2.54	$2.16 billion	$2.55	11.21

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

Dividends

Horizon Bancorp (IN) pays an annual dividend of $0.64 per share and has a dividend yield of 3.1%. Regions Financial pays an annual dividend of $1.20 per share and has a dividend yield of 4.2%. Horizon Bancorp (IN) pays out 30.6% of its earnings in the form of a dividend. Regions Financial pays out 47.1% 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. Regions Financial has increased its dividend for 12 consecutive years. Regions Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

Horizon Bancorp (IN) has a beta of 0.84, indicating that its share price is 16% less volatile than the S&P 500. Comparatively, Regions Financial has a beta of 1.05, indicating that its share price is 5% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and target prices for Horizon Bancorp (IN) and Regions Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Horizon Bancorp (IN)	0	2	3	0	2.60
Regions Financial	3	10	7	0	2.20

Horizon Bancorp (IN) currently has a consensus price target of $24.00, suggesting a potential upside of 15.94%. Regions Financial has a consensus price target of $31.00, suggesting a potential upside of 8.43%. Given Horizon Bancorp (IN)’s stronger consensus rating and higher probable upside, research analysts clearly believe Horizon Bancorp (IN) is more favorable than Regions Financial.

Profitability

This table compares Horizon Bancorp (IN) and Regions Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Horizon Bancorp (IN)	26.52%	15.14%	1.63%
Regions Financial	23.97%	13.43%	1.45%

Summary

Regions Financial beats Horizon Bancorp (IN) on 9 of the 17 factors compared between the two stocks.

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.

About Regions Financial

Regions Financial Corporation, a financial holding company, provides banking and bank-related services to individual and corporate customers. It operates through three segments: Corporate Bank, Consumer Bank, and Wealth Management. The Corporate Bank segment offers commercial banking services, such as commercial and industrial, commercial real estate, and investor real estate lending; equipment lease financing; deposit products; and securities underwriting and placement, loan syndication and placement, foreign exchange, derivatives, merger and acquisition, and other advisory services. It serves corporate, middle market, and commercial real estate developers and investors. The Consumer Bank segment provides consumer banking products and services related to residential first mortgages, home equity lines and loans, consumer credit cards, and other consumer loans, as well as deposits. The Wealth Management segment offers credit related products, and retirement and savings solutions; and trust and investment management, asset management, and estate planning services to individuals, businesses, governmental institutions, and non-profit entities. It also provides investment and insurance products; low-income housing tax credit corporate fund syndication services; and other specialty financing services. The company was founded in 1971 and is headquartered in Birmingham, Alabama.