Critical Contrast: Independent Bank Group (NASDAQ:IBTX) versus FB Financial (NYSE:FBK)

FB Financial (NYSE:FBKGet Rating) and Independent Bank Group (NASDAQ:IBTXGet Rating) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, dividends, analyst recommendations, profitability, valuation and risk.

Risk and Volatility

FB Financial has a beta of 1.07, meaning that its share price is 7% more volatile than the S&P 500. Comparatively, Independent Bank Group has a beta of 1.5, meaning that its share price is 50% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations and price targets for FB Financial and Independent Bank Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
FB Financial 1 0 3 0 2.50
Independent Bank Group 0 1 3 0 2.75

FB Financial presently has a consensus price target of $46.00, suggesting a potential upside of 12.41%. Independent Bank Group has a consensus price target of $78.33, suggesting a potential upside of 12.89%. Given Independent Bank Group’s stronger consensus rating and higher possible upside, analysts clearly believe Independent Bank Group is more favorable than FB Financial.

Dividends

FB Financial pays an annual dividend of $0.52 per share and has a dividend yield of 1.3%. Independent Bank Group pays an annual dividend of $1.52 per share and has a dividend yield of 2.2%. FB Financial pays out 16.7% of its earnings in the form of a dividend. Independent Bank Group pays out 31.0% 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. FB Financial has increased its dividend for 3 consecutive years and Independent Bank Group has increased its dividend for 5 consecutive years. Independent Bank Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares FB Financial and Independent Bank Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
FB Financial $613.25 million 3.13 $190.29 million $3.11 13.16
Independent Bank Group $650.08 million 4.39 $224.75 million $4.90 14.16

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

Institutional and Insider Ownership

65.1% of FB Financial shares are held by institutional investors. Comparatively, 76.3% of Independent Bank Group shares are held by institutional investors. 1.9% of FB Financial shares are held by company insiders. Comparatively, 3.3% of Independent Bank Group shares are held 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.

Profitability

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

Net Margins Return on Equity Return on Assets
FB Financial 25.37% 10.88% 1.22%
Independent Bank Group 32.74% 8.49% 1.16%

Summary

Independent Bank Group beats FB Financial on 13 of the 16 factors compared between the two stocks.

About FB Financial

(Get Rating)

FB Financial Corporation operates as a bank holding company for FirstBank that provides a suite of commercial and consumer banking services to businesses, professionals, and individuals. The company operates in two segments, Banking and Mortgage. It offers checking, demand, money market, and savings accounts; deposit and lending products and services to corporate, commercial, and consumer customers; and time deposits and certificates of deposits, as well as engages in the mortgage origination business. The company also provides owner-occupied and non-owner-occupied real estate commercial, residential real estate 1-4 family mortgage, multi-family residential, commercial and industrial, construction, land acquisition, residential lines of credit, and land development loans; and consumer and other loans, such as car, boat, and other recreational vehicle loans, as well as manufactured homes without real estate and personal lines of credit. In addition, the company offers mortgage banking services through its bank branch networks in the southeastern United States; an internet delivery channel; and trust, insurance, and investment services, as well as online and mobile banking services. As of December 31, 2021, it operated 82 full-service bank branches and 9 limited-service branches locations throughout Tennessee, North Alabama, Southern Kentucky, and North Georgia; and 23 mortgage offices throughout the southeastern United States. The company was formerly known as First South Bancorp, Inc. and changed its name to FB Financial Corporation in 2016. FB Financial Corporation was founded in 1906 and is headquartered in Nashville, Tennessee.

About Independent Bank Group

(Get Rating)

Independent Bank Group, Inc. operates as the bank holding company for Independent Bank that provides various commercial banking products and services to businesses, professionals, and individuals in the United States. It accepts various deposit products, including checking and savings accounts, demand deposits, money market accounts, and certificates of deposit. The company also provides commercial real estate loans; commercial construction, land, and land development loans; residential real estate loans; single-family interim construction loans; commercial loans comprising SBA guaranteed loans, business term loans, equipment lease financing, lines of credit, and energy related loans; agricultural loans for farmers and ranchers; consumer installment loans comprising loans to purchase cars, boats, and other recreational vehicles; and residential mortgages, as well as mortgage warehouse purchase loans. In addition, it offers debit cards, online and mobile banking, eStatement, bank-by-mail, and direct deposit services; and business accounts and management services, including analyzed business checking, business savings, and treasury management services. As of December 31, 2021, the company operated 93 full-service branches. Independent Bank Group, Inc. was founded in 2002 and is headquartered in McKinney, Texas.

Receive News & Ratings for FB Financial Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for FB Financial and related companies with MarketBeat.com's FREE daily email newsletter.