Analyzing Independent Bank Co.(MI) (NASDAQ:IBCP) & Carolina Financial (NASDAQ:CARO) – Sundance Herald

Analyzing Independent Bank Co.(MI) (NASDAQ:IBCP) & Carolina Financial (NASDAQ:CARO)

Carolina Financial (NASDAQ:CARO) and Independent Bank Co.(MI) (NASDAQ:IBCP) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, risk, valuation, earnings and dividends.

Carolina Financial pays an annual dividend of $0.32 per share and has a dividend yield of 0.9%. Independent Bank Co.(MI) pays an annual dividend of $0.72 per share and has a dividend yield of 3.3%. Carolina Financial pays out 11.2% of its earnings in the form of a dividend. Independent Bank Co.(MI) pays out 42.9% 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. Carolina Financial has raised its dividend for 4 consecutive years and Independent Bank Co.(MI) has raised its dividend for 3 consecutive years.

Risk & Volatility

Carolina Financial has a beta of 1.03, meaning that its stock price is 3% more volatile than the S&P 500. Comparatively, Independent Bank Co.(MI) has a beta of 0.41, meaning that its stock price is 59% less volatile than the S&P 500.

Earnings & Valuation

This table compares Carolina Financial and Independent Bank Co.(MI)’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Carolina Financial $200.95 million 3.77 $49.67 million $2.86 11.86
Independent Bank Co.(MI) $175.59 million 2.91 $39.84 million $1.68 12.97

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

Insider & Institutional Ownership

56.0% of Carolina Financial shares are held by institutional investors. Comparatively, 80.3% of Independent Bank Co.(MI) shares are held by institutional investors. 6.9% of Carolina Financial shares are held by insiders. Comparatively, 2.2% of Independent Bank Co.(MI) shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Carolina Financial and Independent Bank Co.(MI)’s net margins, return on equity and return on assets.

Source: Analyzing Independent Bank Co.(MI) (NASDAQ:IBCP) & Carolina Financial (NASDAQ:CARO) – Sundance Herald