Comparing QNB (OTCMKTS:QNBC) & Independent Bank (NASDAQ:INDB)

Independent Bank (NASDAQ:INDB) and QNB (OTCMKTS:QNBC) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, dividends, valuation, profitability, institutional ownership, earnings and analyst recommendations.

Risk and Volatility

Independent Bank has a beta of 0.77, indicating that its stock price is 23% less volatile than the S&P 500. Comparatively, QNB has a beta of 0.52, indicating that its stock price is 48% less volatile than the S&P 500.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Independent Bank	$689.53 million	3.74	$239.50 million	$5.18	11.71
QNB	$73.92 million	1.44	$9.48 million	$2.19	13.20

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

Institutional and Insider Ownership

83.4% of Independent Bank shares are owned by institutional investors. Comparatively, 0.7% of QNB shares are owned by institutional investors. 0.9% of Independent Bank shares are owned by company insiders. Comparatively, 16.0% of QNB shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Independent Bank	22.42%	7.41%	1.11%
QNB	10.28%	9.61%	0.50%

Dividends

Independent Bank pays an annual dividend of $2.28 per share and has a dividend yield of 3.8%. QNB pays an annual dividend of $1.48 per share and has a dividend yield of 5.1%. Independent Bank pays out 44.0% of its earnings in the form of a dividend. QNB pays out 67.6% 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. Independent Bank has raised its dividend for 14 consecutive years.

Analyst Ratings

This is a breakdown of current ratings and target prices for Independent Bank and QNB, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Independent Bank	0	1	0	1	3.00
QNB	0	0	0	0	N/A

Independent Bank currently has a consensus price target of $60.00, suggesting a potential downside of 1.07%. Given Independent Bank’s higher possible upside, equities analysts clearly believe Independent Bank is more favorable than QNB.

Summary

Independent Bank beats QNB on 12 of the 16 factors compared between the two stocks.

About Independent Bank

Independent Bank Corp. operates as the bank holding company for Rockland Trust Company that provides commercial banking products and services to individuals and small-to-medium sized businesses in the United States. The company provides interest checking, money market, and savings accounts, as well as demand deposits and time certificates of deposit. It offers commercial real estate and construction, commercial and industrial, small business, secured and unsecured commercial, and consumer real estate loans; term loans and revolving/nonrevolving lines of credit; overdraft protection and letters of credit; and residential mortgages and home equity loans and lines. In addition, the company provides cash management services, such as ACH transaction processing, positive pay, and remote deposit services; investment management and trust services to individuals, institutions, small businesses, and charitable institutions; mobile, online, and telephone banking; estate settlement, financial planning, tax services, and other services; automated teller machines; debit and credit cards; and mutual fund and unit investment trust shares, third party model portfolios, general securities, fixed and variable annuities, and life insurance products, as well as advisory platforms. Further, it invests in low-income housing tax credit projects; holds, maintains, and disposes foreclosed properties; and operates as an investment advisor. Independent Bank Corp. was founded in 1907 and is headquartered in Rockland, Massachusetts.

About QNB

QNB Corp. operates as the bank holding company for QNB Bank that engages in the provision of commercial and retail banking products, and retail brokerage services. It offers various deposit products, which include demand and savings accounts, such as money market, interest-bearing demand, club, traditional statement savings, and online savings accounts; and time deposits comprising certificates of deposit and individual retirement accounts. The company also provides commercial and industrial loans, commercial and residential real estate loans, construction and land development loans, indirect lease financing, 1-4 family residential mortgage loans, home equity loans and lines of credit, and consumer loans. In addition, it offers retail brokerage and advisory services; credit cards and insurance products; merchant services; ATM and debit card services; and internet and mobile-banking, electronic bill pay, and remote deposit capture services. The company serves other community banks, thrift institutions, credit unions and other non-bank financial organizations, such as mutual fund companies, insurance companies, and brokerage companies. QNB Corp. was founded in 1877 and is based in Quakertown, Pennsylvania.