Horizon Bancorp (NASDAQ:HBNC) versus First Interstate BancSystem (NASDAQ:FIBK) Financial Analysis

First Interstate BancSystem (NASDAQ:FIBKGet Free Report) and Horizon Bancorp (NASDAQ:HBNCGet Free Report) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, dividends, analyst recommendations, earnings, profitability and risk.

Risk and Volatility

First Interstate BancSystem has a beta of 0.85, meaning that its share price is 15% less volatile than the S&P 500. Comparatively, Horizon Bancorp has a beta of 1.04, meaning that its share price is 4% more volatile than the S&P 500.

Institutional and Insider Ownership

88.7% of First Interstate BancSystem shares are owned by institutional investors. Comparatively, 64.5% of Horizon Bancorp shares are owned by institutional investors. 6.9% of First Interstate BancSystem shares are owned by company insiders. Comparatively, 2.8% of Horizon Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Dividends

First Interstate BancSystem pays an annual dividend of $1.88 per share and has a dividend yield of 6.8%. Horizon Bancorp pays an annual dividend of $0.64 per share and has a dividend yield of 5.1%. First Interstate BancSystem pays out 74.9% of its earnings in the form of a dividend. Horizon Bancorp pays out 118.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. First Interstate BancSystem has increased its dividend for 11 consecutive years and Horizon Bancorp has increased its dividend for 13 consecutive years. First Interstate BancSystem is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of current recommendations for First Interstate BancSystem and Horizon Bancorp, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Interstate BancSystem 0 3 2 0 2.40
Horizon Bancorp 0 2 1 0 2.33

First Interstate BancSystem presently has a consensus price target of $30.20, suggesting a potential upside of 9.78%. Horizon Bancorp has a consensus price target of $12.50, suggesting a potential downside of 0.40%. Given First Interstate BancSystem’s stronger consensus rating and higher possible upside, research analysts plainly believe First Interstate BancSystem is more favorable than Horizon Bancorp.

Profitability

This table compares First Interstate BancSystem and Horizon Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
First Interstate BancSystem 17.76% 8.51% 0.88%
Horizon Bancorp 7.02% 8.75% 0.78%

Earnings & Valuation

This table compares First Interstate BancSystem and Horizon Bancorp’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First Interstate BancSystem $1.43 billion 2.02 $257.50 million $2.51 10.96
Horizon Bancorp $324.30 million 1.71 $27.98 million $0.54 23.24

First Interstate BancSystem has higher revenue and earnings than Horizon Bancorp. First Interstate BancSystem is trading at a lower price-to-earnings ratio than Horizon Bancorp, indicating that it is currently the more affordable of the two stocks.

Summary

First Interstate BancSystem beats Horizon Bancorp on 13 of the 17 factors compared between the two stocks.

About First Interstate BancSystem

(Get Free Report)

First Interstate BancSystem, Inc. operates as the bank holding company for First Interstate Bank that provides range of banking products and services in the United States. It offers various traditional depository products, including checking, savings, and time deposits; and repurchase agreements primarily for commercial and municipal depositors. The company also offers real estate loans comprising commercial real estate, construction, residential, agricultural, and other real estate loans; consumer loans comprising direct personal loans, credit card loans and lines of credit, and indirect loans; variable and fixed rate commercial loans for small and medium-sized manufacturing, wholesale, retail, and service businesses for working capital needs and business expansions; and agricultural loans. In addition, it provides a range of trust, employee benefit, investment management, insurance, agency, and custodial services to individuals, businesses, and nonprofit organizations. Further, the company offers marketing, credit review, loan servicing, credit cards issuance and servicing, mortgage loan sales and servicing, indirect consumer loan purchasing and processing, loan collection services, other operational, and specialized staff support services, as well as online and mobile banking services. The company serves individuals, businesses, municipalities, and other entities in various industries, including agriculture, construction, education, governmental services, healthcare, hospitality, housing, professional services, real estate development, retail, technology, tourism, and wholesale trade. First Interstate BancSystem, Inc. was incorporated in 1971 and is headquartered in Billings, Montana.

About Horizon Bancorp

(Get Free Report)

Horizon Bancorp, Inc. operates as the bank holding company for Horizon Bank that engages in the provision of commercial and retail banking services. The company offers checking, saving, money market, certificate of deposits, individual retirement accounts, and time deposits, as well as non-interest- and interest-bearing demand deposits. It also provides commercial, residential real estate, mortgage, home equity, auto, personal, business, agricultural, and SBA loans, as well as credit cards. In addition, the company offers corporate and individual trust and agency, investment management, and real estate investment trust services; debit cards; treasury management; online and mobile banking; wealth, retirement, and estate and trust services; and sells various insurance products. It operates through 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.

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