Head to Head Analysis: Independent Bank (NASDAQ:INDB) vs. ServisFirst Bancshares (NASDAQ:SFBS)

Independent Bank (NASDAQ:INDBGet Rating) and ServisFirst Bancshares (NASDAQ:SFBSGet Rating) are both mid-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitability, institutional ownership, earnings, risk, dividends, valuation and analyst recommendations.

Dividends

Independent Bank pays an annual dividend of $2.04 per share and has a dividend yield of 2.7%. ServisFirst Bancshares pays an annual dividend of $0.92 per share and has a dividend yield of 1.1%. Independent Bank pays out 58.1% of its earnings in the form of a dividend. ServisFirst Bancshares pays out 23.4% 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 13 consecutive years. Independent Bank is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares Independent Bank and ServisFirst Bancshares’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Independent Bank $521.13 million 6.89 $120.99 million $3.51 21.88
ServisFirst Bancshares $449.76 million 9.69 $207.73 million $3.93 20.43

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

Profitability

This table compares Independent Bank and ServisFirst Bancshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Independent Bank 23.51% 8.61% 1.18%
ServisFirst Bancshares 46.29% 18.82% 1.45%

Insider and Institutional Ownership

83.4% of Independent Bank shares are owned by institutional investors. Comparatively, 62.5% of ServisFirst Bancshares shares are owned by institutional investors. 1.0% of Independent Bank shares are owned by company insiders. Comparatively, 8.3% of ServisFirst Bancshares shares are owned 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.

Volatility and Risk

Independent Bank has a beta of 0.86, indicating that its stock price is 14% less volatile than the S&P 500. Comparatively, ServisFirst Bancshares has a beta of 1.05, indicating that its stock price is 5% more volatile than the S&P 500.

Analyst Recommendations

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Independent Bank 0 1 0 0 2.00
ServisFirst Bancshares 0 2 0 0 2.00

Independent Bank currently has a consensus price target of $88.00, indicating a potential upside of 14.57%. ServisFirst Bancshares has a consensus price target of $86.50, indicating a potential upside of 7.72%. Given Independent Bank’s higher probable upside, equities research analysts plainly believe Independent Bank is more favorable than ServisFirst Bancshares.

Summary

ServisFirst Bancshares beats Independent Bank on 9 of the 15 factors compared between the two stocks.

About Independent Bank (Get Rating)

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 primarily in Massachusetts. The company accepts interest checking, money market, and savings accounts, as well as demand deposits and time certificates of deposit. It also offers commercial and industrial, commercial real estate and construction, small business, consumer real estate, and personal loans. In addition, the company provides investment management and trust services to individuals, institutions, small businesses, and charitable institutions; Internet and mobile banking services, as well as estate settlement, financial planning, tax services, and other services; automated teller machine and debit cards; and mutual fund and unit investment trust shares, general securities, fixed and variable annuities, and life insurance products. As of December 31, 2021, it operates one hundred nineteen retail branches, two limited-service retail branches, and one mobile branch located within Barnstable, Bristol, Dukes, Essex, Middlesex, Nantucket, Norfolk, Plymouth, Suffolk, and Worcester counties in Eastern Massachusetts. The company was founded in 1907 and is headquartered in Rockland, Massachusetts.

About ServisFirst Bancshares (Get Rating)

ServisFirst Bancshares, Inc. operates as the bank holding company for ServisFirst Bank that provides various banking services to individual and corporate customers. It accepts demand, time, savings, and other deposits; checking, money market, and IRA accounts; and certificates of deposit. The company's loan products include commercial lending products, such as seasonal, bridge, and term loans for working capital, expansion of the business, acquisition of property, and plant and equipment, as well as commercial lines of credit; commercial real estate loans, construction and development loans, and residential real estate loans; and consumer loans, such as home equity loans, vehicle financing, loans secured by deposits, and secured and unsecured personal loans. It also offers other banking products and services comprising telephone and mobile banking, direct deposit, Internet banking, traveler's checks, safe deposit boxes, attorney trust accounts, automatic account transfers, automated teller machines, and debit card systems, as well as Visa credit cards; treasury and cash management services; wire transfer, night depository, banking-by-mail, and remote capture services; and correspondent banking services to other financial institutions. In addition, the company holds and manages participations in residential mortgages and commercial real estate loans originated by ServisFirst Bank in Alabama, Florida, Georgia, and Tennessee. It operates 23 full-service banking offices located in Alabama, Florida, Georgia, South Carolina, and Tennessee, as well as 2 loan production offices in Florida. The company was founded in 2005 and is headquartered in Birmingham, Alabama.

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