German American Bancorp (NASDAQ:GABC) & FB Financial (NYSE:FBK) Financial Review

FB Financial (NYSE:FBK) and German American Bancorp (NASDAQ:GABC) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their valuation, profitability, institutional ownership, risk, earnings, dividends and analyst recommendations.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for FB Financial and German American Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FB Financial	1	3	3	0	2.29
German American Bancorp	0	1	1	0	2.50

FB Financial currently has a consensus price target of $39.43, suggesting a potential upside of 7.03%. German American Bancorp has a consensus price target of $37.50, suggesting a potential upside of 18.37%. Given German American Bancorp’s stronger consensus rating and higher probable upside, analysts clearly believe German American Bancorp is more favorable than FB Financial.

Dividends

FB Financial pays an annual dividend of $0.68 per share and has a dividend yield of 1.9%. German American Bancorp pays an annual dividend of $1.08 per share and has a dividend yield of 3.4%. FB Financial pays out 28.6% of its earnings in the form of a dividend. German American Bancorp pays out 37.0% 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 raised its dividend for 5 consecutive years and German American Bancorp has raised its dividend for 12 consecutive years. German American Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

65.4% of FB Financial shares are held by institutional investors. Comparatively, 46.9% of German American Bancorp shares are held by institutional investors. 1.7% of FB Financial shares are held by company insiders. Comparatively, 4.6% of German American Bancorp 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.

Earnings & Valuation

This table compares FB Financial and German American Bancorp’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
FB Financial	$748.95 million	2.30	$120.22 million	$2.38	15.40
German American Bancorp	$316.92 million	2.96	$85.89 million	$2.92	10.87

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

Risk & Volatility

FB Financial has a beta of 1.15, suggesting that its stock price is 15% more volatile than the S&P 500. Comparatively, German American Bancorp has a beta of 0.62, suggesting that its stock price is 38% less volatile than the S&P 500.

Profitability

This table compares FB Financial and German American Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
FB Financial	14.90%	10.20%	1.15%
German American Bancorp	27.10%	14.26%	1.42%

Summary

German American Bancorp beats FB Financial on 10 of the 17 factors compared between the two stocks.

About FB Financial

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 segments, such as 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 residential mortgage loans. 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 network and mortgage banking offices in the southeastern United States; direct-to-consumer internet delivery channel; and trust, insurance, and investment services, as well as online and mobile banking services. The company operates full-service bank branches and limited-service branches locations throughout Tennessee, Nashville, Chattanooga, Knoxville, Memphis, Jackson, Birmingham, Florence, Huntsville, Alabama, Bowling Green, and Kentucky; and 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 German American Bancorp

German American Bancorp, Inc. operates as a financial holding company for German American Bank that provides retail and commercial banking services. The company operates through three segments: Core Banking, Wealth Management Services, and Insurance Operations. The Core Banking segment accepts deposits from the general public; and originates consumer, commercial and agricultural, commercial and agricultural real estate, and residential mortgage loans, as well as sells residential mortgage loans in the secondary market. The Wealth Management segment provides trust, investment advisory, brokerage, and retirement planning services. The Insurance Operations segment offers a range of personal and corporate property and casualty insurance products. It also offers checking, saving, and individual retirement accounts; certificates of deposit; wire transfer; credit cards; home equity, mortgages, and small business; treasury management; and online and mobile banking, bill pay, digital wallet, mobile check deposit, credit score and report, money management, and estatements, as well as wealth advisory. German American Bancorp, Inc. was founded in 1910 and is based in Jasper, Indiana.