Financial Analysis: Horizon Bancorp (NASDAQ:HBNC) vs. Community Trust Bancorp (NASDAQ:CTBI)

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Horizon Bancorp (NASDAQ:HBNC – Get Rating) and Community Trust Bancorp (NASDAQ:CTBI – Get Rating) are both small cap finance companies, but which is the better company? We’ll compare the two companies based on earnings strength, institutional ownership, dividends, analyst recommendations, profitability, valuation and risk.

Risk and Volatility

Horizon Bancorp has a beta of 1.11, meaning its stock price is 11% more volatile than the S&P 500. In comparison, Community Trust Bancorp has a beta of 0.76, meaning its stock price is 24% less volatile than the S&P 500.

Analyst Notes

This is a summary of recent recommendations and price targets for Horizon Bancorp and Community Trust Bancorp, as provided by MarketBeat.

Sales Ratings Hold odds Buy reviews Strong buy odds Rating
Horizon Bancorp 0 0 0 1 4.00
Community Trust Bank 0 0 0 0 N / A

Horizon Bancorp currently has a consensus price target of $25.00, suggesting a potential upside of 47.84%. Given Horizon Bancorp’s possible higher upside, equity research analysts clearly believe that Horizon Bancorp is more favorable than Community Trust Bancorp.

Dividends

Horizon Bancorp pays an annual dividend of $0.60 per share and has a dividend yield of 3.5%. Community Trust Bancorp pays an annual dividend of $1.60 per share and has a dividend yield of 4.0%. Horizon Bancorp pays 29.3% of its earnings as a dividend. Community Trust Bancorp pays 33.9% of its profits as a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings over the next few years. Horizon Bancorp has increased its dividend for 12 consecutive years and Community Trust Bancorp has increased its dividend for 42 consecutive years. Community Trust Bancorp is clearly the best dividend stock, given its higher yield and longer track record of dividend growth.

Benefits and evaluation

This chart compares revenue, earnings per share, and valuation of Horizon Bancorp and Community Trust Bancorp.

Gross revenue Price/sales ratio Net revenue Earnings per share Price/earnings ratio
Horizon Bancorp $257.95 million 2.86 $87.09 million $2.05 8.25
Community Trust Bank $238.63 million 3.02 $87.94 million $4.72 8.53

Community Trust Bancorp has lower revenue, but higher earnings than Horizon Bancorp. Horizon Bancorp trades at a lower price-to-earnings ratio than Community Trust Bancorp, indicating that it is currently the more affordable of the two stocks .

Institutional and Insider Ownership

54.4% of Horizon Bancorp’s shares are held by institutional investors. By comparison, 58.0% of Community Trust Bancorp’s shares are held by institutional investors. 3.5% of Horizon Bancorp shares are held by insiders of the company. By comparison, 4.1% of Community Trust Bancorp’s shares are held by insiders of the company. Strong institutional ownership is an indication that endowments, hedge funds, and large money managers believe a company is poised for long-term growth.

Profitability

This table compares the net margins, return on equity and return on assets of Horizon Bancorp and Community Trust Bancorp.

Net margins Return on equity return on assets
Horizon Bancorp 34.35% 13.14% 1.30%
Community Trust Bank 35.41% 12.33% 1.55%

Summary

Community Trust Bancorp beats Horizon Bancorp on 10 of the 16 factors compared between the two stocks.

About Horizon Bancorp (Get an assessment)

Horizon Bancorp, Inc. operates as a bank holding company for Horizon Bank which provides a range of commercial and retail banking services. The company offers various deposits. It also offers commercial and residential real estate, mortgage warehouse and consumer loans. In addition, the Company provides corporate and individual trust and agency services, investment management and real estate investment trust; and sells various insurance products. It operates through a network of 78 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 Community Trust Bancorp (Get an assessment)

Community Trust Bancorp LogoCommunity Trust Bancorp, Inc. operates as a bank holding company for Community Trust Bank, Inc. which provides commercial and personal banking services to small and medium communities. The company accepts term and demand deposits, checking accounts, savings accounts and savings certificates, individual retirement accounts and Keogh plans and money market accounts. Its lending products include commercial, construction, mortgage and personal loans; leasing, lines of credit, revolving lines of credit and term loans, and other specialty lending, including asset-based financing; residential and commercial real estate loans; and consumer loans. The company also offers cash management, safe deposit box rental and funds transfer services; issues letters of credit; and acts as trustee of personal trusts, executor, trustee of employee benefit trusts and paying agent for bond and stock issues, as well as investment agent and depositor of securities movables. In addition, it provides securities brokerage, trust and wealth management services; debit cards; annuity and life insurance products; and repurchase agreements, as well as mobile, internet banking and e-statement services. The company operates 79 banking locations in eastern, northeast, central, south-central Kentucky, southern West Virginia and northeast Tennessee; 4 trust offices across Kentucky; and 1 fiduciary office in northeast Tennessee. Community Trust Bancorp, Inc. was founded in 1903 and is headquartered in Pikeville, Kentucky.



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