Business First Bancshares (NASDAQ:BFST – Get Free Report) and Horizon Bancorp (IN) (NASDAQ:HBNC – Get Free Report) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, dividends, institutional ownership, valuation, risk, analyst recommendations and earnings.
Valuation & Earnings
This table compares Business First Bancshares 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 | |
| Business First Bancshares | $516.55 million | 1.74 | $87.86 million | $2.82 | 9.75 |
| Horizon Bancorp (IN) | $405.46 million | 2.31 | -$150.48 million | ($3.18) | -5.76 |
Dividends
Business First Bancshares pays an annual dividend of $0.60 per share and has a dividend yield of 2.2%. Horizon Bancorp (IN) pays an annual dividend of $0.64 per share and has a dividend yield of 3.5%. Business First Bancshares pays out 21.3% of its earnings in the form of a dividend. Horizon Bancorp (IN) pays out -20.1% 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. Business First Bancshares has raised its dividend for 2 consecutive years. Horizon Bancorp (IN) is clearly the better dividend stock, given its higher yield and lower payout ratio.
Analyst Ratings
This is a breakdown of current recommendations and price targets for Business First Bancshares and Horizon Bancorp (IN), as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Business First Bancshares | 0 | 0 | 4 | 0 | 3.00 |
| Horizon Bancorp (IN) | 0 | 3 | 2 | 0 | 2.40 |
Business First Bancshares presently has a consensus target price of $32.33, indicating a potential upside of 17.58%. Horizon Bancorp (IN) has a consensus target price of $20.67, indicating a potential upside of 12.81%. Given Business First Bancshares’ stronger consensus rating and higher possible upside, analysts clearly believe Business First Bancshares is more favorable than Horizon Bancorp (IN).
Profitability
This table compares Business First Bancshares and Horizon Bancorp (IN)’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Business First Bancshares | 17.02% | 11.51% | 1.15% |
| Horizon Bancorp (IN) | -37.28% | 12.35% | 1.27% |
Insider and Institutional Ownership
47.4% of Business First Bancshares shares are owned by institutional investors. Comparatively, 64.5% of Horizon Bancorp (IN) shares are owned by institutional investors. 5.7% of Business First Bancshares shares are owned by company insiders. Comparatively, 1.2% of Horizon Bancorp (IN) shares are owned 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.
Volatility and Risk
Business First Bancshares has a beta of 0.79, meaning that its share price is 21% less volatile than the S&P 500. Comparatively, Horizon Bancorp (IN) has a beta of 0.83, meaning that its share price is 17% less volatile than the S&P 500.
Summary
Business First Bancshares beats Horizon Bancorp (IN) on 10 of the 17 factors compared between the two stocks.
About Business First Bancshares
Business First Bancshares, Inc. operates as the bank holding company for b1BANK that provides various banking products and services in Louisiana and Texas. It offers various deposit products and services, including checking, demand, money market, time, and savings accounts; and certificates of deposits, remote deposit capture, and direct deposit services. The company also provides commercial and industrial loans, such as working capital, term, equipment financing, asset acquisition, expansion and development, borrowing base, and other loan products, as well as commercial lines of credit, accounts receivable factoring, agricultural financing, and letters of credit; construction and development loans; commercial real estate loans; residential real estate loans comprising first and second lien 1-4 family mortgage loans, and home equity lines of credit; and consumer loans, including secured and unsecured installment, and term loans. In addition, it offers wealth management products, including mutual funds, annuities, individual retirement accounts, and other financial products, as well as other fiduciary and private banking products and services. Further, the company provides a range of other financial services comprising debit and credit cards, treasury and cash management, merchant, automated clearing house, lock-box, receivables factoring, correspondent banking, and other treasury services, as well as employee and payroll benefits solutions; and drive-through banking facilities, automated teller machines, night depository, personalized checks, electronic funds transfer, domestic and foreign wire transfer, traveler's checks, vault, loan and deposit sweep accounts, online and mobile banking, e-statements, and bank-by-mail services. Business First Bancshares, Inc. was founded in 2006 and is headquartered in Baton Rouge, Louisiana.
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.
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