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

Earnings and Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Independent Bank Group $229.60 million 8.99 $53.54 million $3.10 23.61
Salisbury Bancorp $42.35 million 3.00 $6.68 million $2.40 19.00

Independent Bank Group has higher revenue and earnings than Salisbury Bancorp. Salisbury Bancorp 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.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Independent Bank Group and Salisbury Bancorp, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Independent Bank Group 0 1 5 0 2.83
Salisbury Bancorp 0 0 1 0 3.00

Independent Bank Group currently has a consensus target price of $72.00, suggesting a potential downside of 1.64%. Salisbury Bancorp has a consensus target price of $51.00, suggesting a potential upside of 11.87%. Given Salisbury Bancorp’s stronger consensus rating and higher probable upside, analysts clearly believe Salisbury Bancorp is more favorable than Independent Bank Group.

Dividends

Independent Bank Group pays an annual dividend of $0.40 per share and has a dividend yield of 0.5%. Salisbury Bancorp pays an annual dividend of $1.12 per share and has a dividend yield of 2.5%. Independent Bank Group pays out 12.9% of its earnings in the form of a dividend. Salisbury Bancorp pays out 46.7% 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.

Profitability

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

Net Margins Return on Equity Return on Assets
Independent Bank Group 23.46% 8.11% 1.08%
Salisbury Bancorp 15.26% 6.95% 0.70%

Insider and Institutional Ownership

47.7% of Independent Bank Group shares are owned by institutional investors. Comparatively, 9.9% of Salisbury Bancorp shares are owned by institutional investors. 7.7% of Independent Bank Group shares are owned by insiders. Comparatively, 19.1% of Salisbury Bancorp shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Risk and Volatility

Independent Bank Group has a beta of 1.31, suggesting that its share price is 31% more volatile than the S&P 500. Comparatively, Salisbury Bancorp has a beta of 0.69, suggesting that its share price is 31% less volatile than the S&P 500.

Summary

Independent Bank Group beats Salisbury Bancorp on 12 of the 16 factors compared between the two stocks.

About Independent Bank Group

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.

About Salisbury Bancorp

Salisbury Bancorp, Inc. is a bank holding company for Salisbury Bank and Trust Company (the Bank). The Bank is a Connecticut-chartered and Federal Deposit Insurance Corporation (the FDIC) insured commercial bank. The Bank provides commercial banking, consumer financing, retail banking and trust and wealth advisory services through a network of over 10 banking offices and approximately nine automated teller machines (ATMs). The Bank originates commercial loans, commercial real estate loans, residential and commercial construction loans, residential real estate loans collateralized by one- to four- family residences, home equity lines of credit, fixed rate loans and other consumer loans. The Bank’s securities portfolio include the United States Government and Agency securities, mortgage-backed securities, collateralized mortgage obligations and tax exempt municipal bonds. The Bank uses deposits, repayments and sales, and borrowings to fund lending, investing and general operations.

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