Independent Bank Group (NASDAQ: IBTX) and Green Bancorp (NASDAQ:GNBC) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their dividends, risk, earnings, profitability, valuation, analyst recommendations and institutional ownership.

Valuation and Earnings

This table compares Independent Bank Group and Green Bancorp’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Independent Bank Group $226.55 million 7.05 $84.48 million $3.04 18.90
Green Bancorp $105.91 million 7.83 $13.33 million $0.36 62.22

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

Volatility & Risk

Independent Bank Group has a beta of 1.26, indicating that its stock price is 26% more volatile than the S&P 500. Comparatively, Green Bancorp has a beta of 2.13, indicating that its stock price is 113% more volatile than the S&P 500.

Dividends

Independent Bank Group pays an annual dividend of $0.40 per share and has a dividend yield of 0.7%. Green Bancorp does not pay a dividend. Independent Bank Group pays out 13.2% of its earnings in the form of a dividend.

Profitability

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

Net Margins Return on Equity Return on Assets
Independent Bank Group 23.52% 8.43% 1.05%
Green Bancorp 7.69% 3.14% 0.34%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Independent Bank Group and Green Bancorp, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Independent Bank Group 0 0 4 0 3.00
Green Bancorp 0 0 2 0 3.00

Independent Bank Group currently has a consensus target price of $70.25, suggesting a potential upside of 22.28%. Green Bancorp has a consensus target price of $18.00, suggesting a potential downside of 19.64%. Given Independent Bank Group’s higher possible upside, equities research analysts clearly believe Independent Bank Group is more favorable than Green Bancorp.

Institutional & Insider Ownership

41.5% of Independent Bank Group shares are owned by institutional investors. Comparatively, 58.5% of Green Bancorp shares are owned by institutional investors. 7.7% of Independent Bank Group shares are owned by company insiders. Comparatively, 16.7% of Green Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Independent Bank Group beats Green Bancorp on 9 of the 15 factors compared between the two stocks.

Independent Bank Group Company Profile

Independent Bank Group, Inc. is a bank holding company. Through the Company’s subsidiary, Independent Bank (the Bank), the Company provides a range of commercial banking products and services tailored to meet the needs of businesses, professionals and individuals. As of December 31, 2016, the Company operated 41 banking offices in the Dallas/North Texas area, the Austin/Central Texas area, and the Houston metropolitan area. The Company offers residential mortgages through its mortgage brokerage division. As a mortgage broker, the Company originates residential mortgages, which are sold into the secondary market shortly after closing. The Company also provides wealth management services to its customers, including investment advisory and other related services. The Company offers a range of commercial and retail lending products to businesses, professionals and individuals. Deposits are the Company’s principal source of funds for use in lending and other general banking purposes.

Green Bancorp Company Profile

Green Bancorp, Inc. is a bank holding company. As of December 31, 2016, the Company’s subsidiary, Green Bank, N.A., a nationally chartered commercial bank, provided commercial and private banking services primarily to Texas based customers through 22 full service branches in the Houston and Dallas metropolitan statistical areas (MSAs) and other markets. The Company provides banking services to a range of customers. It offers a suite of online banking solutions, including access to account balances, online transfers, online bill payment and electronic delivery of customer statements, as well as extended drive through hours, automated teller machines (ATMs), Bank at Work and banking by telephone, mail and personal appointment. The Company also offers debit cards, night depository, direct deposit, cashier’s checks and letters of credit, as well as treasury management services, wire transfer services and automated clearing house (ACH) services.

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