Great Western Bancorp (NYSE: GWB) and Independent Bank Group (NASDAQ:IBTX) are both mid-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, dividends, valuation, earnings, risk, analyst recommendations and profitability.
Earnings and Valuation
This table compares Great Western Bancorp and Independent Bank Group’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Great Western Bancorp||$497.73 million||5.05||$144.78 million||$2.46||17.35|
|Independent Bank Group||$349.20 million||5.95||$76.51 million||$3.45||19.77|
This is a breakdown of recent recommendations and price targets for Great Western Bancorp and Independent Bank Group, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Great Western Bancorp||0||3||5||0||2.63|
|Independent Bank Group||0||1||5||0||2.83|
Great Western Bancorp currently has a consensus price target of $46.25, suggesting a potential upside of 8.36%. Independent Bank Group has a consensus price target of $78.60, suggesting a potential upside of 15.25%. Given Independent Bank Group’s stronger consensus rating and higher probable upside, analysts plainly believe Independent Bank Group is more favorable than Great Western Bancorp.
This table compares Great Western Bancorp and Independent Bank Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Great Western Bancorp||28.45%||9.36%||1.41%|
|Independent Bank Group||25.16%||8.10%||1.23%|
Institutional and Insider Ownership
59.4% of Independent Bank Group shares are owned by institutional investors. 0.3% of Great Western Bancorp shares are owned by insiders. Comparatively, 10.9% of Independent Bank Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Volatility & Risk
Great Western Bancorp has a beta of 1.53, meaning that its share price is 53% more volatile than the S&P 500. Comparatively, Independent Bank Group has a beta of 1.22, meaning that its share price is 22% more volatile than the S&P 500.
Great Western Bancorp pays an annual dividend of $1.00 per share and has a dividend yield of 2.3%. Independent Bank Group pays an annual dividend of $0.56 per share and has a dividend yield of 0.8%. Great Western Bancorp pays out 40.7% of its earnings in the form of a dividend. Independent Bank Group pays out 16.2% 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. Great Western Bancorp has increased its dividend for 2 consecutive years and Independent Bank Group has increased its dividend for 4 consecutive years.
Independent Bank Group beats Great Western Bancorp on 9 of the 16 factors compared between the two stocks.
About Great Western Bancorp
Great Western Bancorp, Inc. operates as the bank holding company for Great Western Bank that provides business and agribusiness banking, retail banking, and wealth management services. The company offers non-interest-bearing demand accounts, interest-bearing savings and money market accounts, individual retirement accounts, and time certificates of deposits, as well as NOW accounts. It also provides agricultural loans; commercial and industrial loans, including working capital and other shorter-term lines of credit, fixed-rate and variable rate loans; commercial real estate (CRE) loans comprising owner-occupied and non-owner-occupied CRE loans, multifamily residential real estate loans, and construction and development loans; short-term working capital funding, long-term land-related lending, and other tailored services; and residential mortgage, home equity, home equity lines of credit and general lines of credit, and auto loans and other loans. In addition, the company offers cash management services, online business deposit, and wire transfer services; credit cards; crop insurance; online, telephone, and mobile banking services; and wealth management solutions consisting of financial planning, private banking, investment management, and trust services through associations with third party vendors, including a registered broker-dealer and investment adviser. It serves retail customers; grain and protein producers; and small and mid-sized businesses in various industries, including ancillary agribusiness services, freight and transport, healthcare, and tourism. As of September 30, 2017, the company's branch network consisted of 173 branches located in 129 communities in Arizona, Colorado, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota, as well as operated 162 ATMs and 21 company-owned ATMs at off-site locations. The company was founded in 1935 and is based in Sioux Falls, South Dakota.
About Independent Bank Group
Independent Bank Group, Inc. operates as the bank holding company for Independent Bank that provides a range of commercial banking products and services to businesses, professionals, and individuals in the United States. It offers various deposit products, including checking and savings accounts, demand accounts, money market accounts, and certificates of deposit, as well as individual retirement accounts. The company also provides commercial real estate loans; commercial construction, land, and land development loans; residential real estate loans; single family interim construction loans; commercial loans comprising SBA guaranteed loans, business term loans, equipment financing, and lines of credit and energy related loans; agricultural loans for farmers and ranchers; consumer loans, such as installment loans comprising loans to purchase cars, boats, and other recreational vehicles; and residential mortgages. In addition, it offers debit cards, online banking, mobile banking, eStatements, bank-by-mail, and direct deposit services; and business accounts and management services, including analyzed business checking, business savings, and treasury management services. As of December 31, 2017, the company operated 70 banking offices located in the Dallas/North Texas area, Austin/Central Texas area, and the Houston metropolitan area. Independent Bank Group, Inc. was founded in 2002 and is headquartered in McKinney, Texas.
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