Head-To-Head Analysis: Harleysville Savings Financial (OTCMKTS:HARL) and Independent Bank (NASDAQ:INDB)

Harleysville Savings Financial (OTCMKTS:HARL) and Independent Bank (NASDAQ:INDB) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, profitability, analyst recommendations, valuation, risk, dividends and institutional ownership.

Valuation & Earnings

This table compares Harleysville Savings Financial and Independent Bank”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Harleysville Savings Financial	$43.61 million	2.25	$9.53 million	$3.27	8.39
Independent Bank	$1.17 billion	3.21	$205.12 million	$5.04	15.37

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

Risk & Volatility

Harleysville Savings Financial has a beta of 0.23, suggesting that its share price is 77% less volatile than the S&P 500. Comparatively, Independent Bank has a beta of 0.78, suggesting that its share price is 22% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations for Harleysville Savings Financial and Independent Bank, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Harleysville Savings Financial	0	0	0	0	0.00
Independent Bank	1	2	3	1	2.57

Independent Bank has a consensus target price of $87.50, suggesting a potential upside of 12.98%. Given Independent Bank’s stronger consensus rating and higher probable upside, analysts clearly believe Independent Bank is more favorable than Harleysville Savings Financial.

Insider and Institutional Ownership

1.2% of Harleysville Savings Financial shares are owned by institutional investors. Comparatively, 83.4% of Independent Bank shares are owned by institutional investors. 14.5% of Harleysville Savings Financial shares are owned by insiders. Comparatively, 1.6% of Independent Bank shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Harleysville Savings Financial pays an annual dividend of $1.40 per share and has a dividend yield of 5.1%. Independent Bank pays an annual dividend of $2.56 per share and has a dividend yield of 3.3%. Harleysville Savings Financial pays out 42.8% of its earnings in the form of a dividend. Independent Bank pays out 50.8% 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 increased its dividend for 15 consecutive years. Harleysville Savings Financial is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Harleysville Savings Financial	24.73%	13.22%	1.30%
Independent Bank	19.14%	8.66%	1.26%

Summary

Independent Bank beats Harleysville Savings Financial on 12 of the 18 factors compared between the two stocks.

About Harleysville Savings Financial

Harleysville Financial Corporation operates as the bank holding company for Harleysville Bank that provides various banking products and services in Pennsylvania. The company offers various deposit products, including savings, money market, and checking accounts, as well as certificates of deposits. It also provides consumer loans, including residential mortgages, savings account loans, and home equity line of credit, construction, and non-real estate consumer loans; and commercial loans, such as commercial mortgages, line of credit, and commercial business loans. In addition, the company offers online banking and bill payment, mobile and telephone banking, remote deposit, debit cards, automated clearing house processing, sweep accounts, zero balance accounts, employee services, and other cash management services. Further, it provides investment services, such as financial consultation, cash and wealth management, education planning, investment strategy, insurance, retirement and estate planning, financial and goal planning, and asset allocation services, as well as offers investment products, such as fixed and variable annuities, mutual funds, life insurances, stocks and bonds, tax-advantaged investments, long-term care insurances, disability insurances, retirement plans/individual retirement accounts, wrap accounts, and unit investment trusts. Its primary market area includes Montgomery County and Bucks County. The company was formerly known as Harleysville Savings Financial Corporation and changed its name to Harleysville Financial Corporation in May 2017. Harleysville Financial Corporation was founded in 1915 and is headquartered in Harleysville, Pennsylvania.

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.