Contrasting Independent Bank (NASDAQ:IBCP) and Bank of Marin Bancorp (NASDAQ:BMRC)

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

Dividends

Independent Bank pays an annual dividend of $0.96 per share and has a dividend yield of 3.0%. Bank of Marin Bancorp pays an annual dividend of $1.00 per share and has a dividend yield of 5.0%. Independent Bank pays out 32.7% of its earnings in the form of a dividend. Bank of Marin Bancorp pays out 120.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Bank of Marin Bancorp has raised its dividend for 18 consecutive years. Bank of Marin Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

79.4% of Independent Bank shares are held by institutional investors. Comparatively, 52.3% of Bank of Marin Bancorp shares are held by institutional investors. 5.5% of Independent Bank shares are held by insiders. Comparatively, 5.7% of Bank of Marin Bancorp shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk and Volatility

Independent Bank has a beta of 0.99, indicating that its stock price is 1% less volatile than the S&P 500. Comparatively, Bank of Marin Bancorp has a beta of 0.92, indicating that its stock price is 8% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Independent Bank	21.11%	16.90%	1.31%
Bank of Marin Bancorp	-9.09%	3.25%	0.37%

Valuation & Earnings

This table compares Independent Bank and Bank of Marin Bancorp”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Independent Bank	$207.12 million	3.27	$59.07 million	$2.94	11.01
Bank of Marin Bancorp	$62.28 million	5.27	$19.90 million	$0.83	24.28

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

Analyst Ratings

This is a summary of current recommendations for Independent Bank and Bank of Marin Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Independent Bank	0	4	0	0	2.00
Bank of Marin Bancorp	0	2	1	0	2.33

Independent Bank currently has a consensus target price of $32.17, suggesting a potential downside of 0.60%. Bank of Marin Bancorp has a consensus target price of $18.00, suggesting a potential downside of 10.67%. Given Independent Bank’s higher possible upside, equities analysts plainly believe Independent Bank is more favorable than Bank of Marin Bancorp.

Summary

Independent Bank beats Bank of Marin Bancorp on 10 of the 17 factors compared between the two stocks.

About Independent Bank

Independent Bank Corporation operates as the bank holding company for Independent Bank that provides commercial banking services to individuals and businesses in rural and suburban communities in Michigan. It offers checking and savings accounts, commercial lending, direct and indirect consumer financing, mortgage lending, and safe deposit box services. The company also provides title insurance services and investment services, as well as automatic teller machines, and internet and mobile banking services. In addition, it operates through branches, drive-thru facilities, and loan production offices. Independent Bank Corporation was founded in 1864 and is based in Grand Rapids, Michigan.

About Bank of Marin Bancorp

Bank of Marin Bancorp operates as the holding company for Bank of Marin that provides a range of financial services primarily to small to medium-sized businesses, not-for-profit organizations, and commercial real estate investors in the United States. The company offers personal and business checking and savings accounts; and individual retirement, health savings, and demand deposit marketplace accounts, as well as time certificates of deposit, certificate of deposit account registry, and insured cash sweep services. It also provides commercial real estate, commercial and industrial, and consumer loans, as well as construction financing and home equity lines of credit. In addition, the company offers merchant and payroll services; commercial equipment leasing program; payment solutions; treasury management services; credit cards; and mobile deposit, remote deposit capture, automated clearing house, wire transfer, and image lockbox services. Further, it provides wealth management and trust services comprising customized investment portfolio management, financial planning, trust administration, estate settlement, and custody services, as well as 401(k) plan services; and automated teller machines, and telephone and digital banking services. The company was incorporated in 1989 and is headquartered in Novato, California.