Independent Bank (NASDAQ:IBCP) vs. Commerzbank (OTCMKTS:CRZBY) Critical Comparison

Independent Bank (NASDAQ:IBCP) and Commerzbank (OTCMKTS:CRZBY) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, profitability, earnings, analyst recommendations, institutional ownership, risk and valuation.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Independent Bank	22.32%	14.12%	1.29%
Commerzbank	13.30%	8.89%	0.53%

Volatility and Risk

Independent Bank has a beta of 0.7, indicating that its share price is 30% less volatile than the S&P 500. Comparatively, Commerzbank has a beta of 0.56, indicating that its share price is 44% less volatile than the S&P 500.

Insider and Institutional Ownership

79.4% of Independent Bank shares are owned by institutional investors. 5.9% of Independent Bank shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations for Independent Bank and Commerzbank, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Independent Bank	0	3	2	0	2.40
Commerzbank	0	3	5	1	2.78

Independent Bank currently has a consensus target price of $39.50, suggesting a potential upside of 9.03%. Given Independent Bank’s higher possible upside, research analysts plainly believe Independent Bank is more favorable than Commerzbank.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Independent Bank	$315.38 million	2.55	$68.54 million	$3.44	10.53
Commerzbank	$26.54 billion	1.85	$2.97 billion	$3.04	15.38

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

Dividends

Independent Bank pays an annual dividend of $1.12 per share and has a dividend yield of 3.1%. Commerzbank pays an annual dividend of $0.90 per share and has a dividend yield of 1.9%. Independent Bank pays out 32.6% of its earnings in the form of a dividend. Commerzbank pays out 29.6% 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. Independent Bank has raised its dividend for 11 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 Commerzbank on 11 of the 18 factors compared between the two stocks.

About Independent Bank

Independent Bank Corporation operates as the bank holding company for Independent Bank that provides commercial banking services to individuals and businesses in rural and suburban communities in Michigan. It offers checking and savings accounts, commercial lending, direct and indirect consumer financing, mortgage lending, and safe deposit box services. The company also provides title insurance services and investment services, as well as automatic teller machines, and internet and mobile banking services. In addition, it operates through branches, drive-thru facilities, and loan production offices. Independent Bank Corporation was founded in 1864 and is based in Grand Rapids, Michigan.

About Commerzbank

Commerzbank AG provides banking and capital market products and services to private and small business customers, corporate, financial service providers, and institutional clients in Germany, rest of Europe, the Americas, Asia, and internationally. It operates through two segments, Private and Small-Business Customers, and Corporate Clients. The company offers saving, checking, business, and current accounts; term deposits; pension; credit and debit cards; payment solutions; overdraft services; various loans; and insurance products. It also provides trade securities; treasury management; corporate financing; real estate financing; financing advisory; merger and acquisition; foreign trade; trade financing; asset and risk management; and online banking, as well as wealth management services. Commerzbank AG was founded in 1870 and is headquartered in Frankfurt am Main, Germany.