Head to Head Review: Hanover Bancorp (NASDAQ:HNVR) and German American Bancorp (NASDAQ:GABC)

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

Volatility and Risk

German American Bancorp has a beta of 0.62, indicating that its stock price is 38% less volatile than the S&P 500. Comparatively, Hanover Bancorp has a beta of -0.14, indicating that its stock price is 114% less volatile than the S&P 500.

Valuation and Earnings

This table compares German American Bancorp and Hanover Bancorp’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
German American Bancorp	$316.92 million	3.10	$85.89 million	$2.92	11.38
Hanover Bancorp	$62.58 million	1.95	$15.16 million	$1.96	8.62

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
German American Bancorp	27.10%	14.26%	1.42%
Hanover Bancorp	10.82%	7.69%	0.65%

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for German American Bancorp and Hanover Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
German American Bancorp	0	1	1	0	2.50
Hanover Bancorp	0	0	1	0	3.00

German American Bancorp currently has a consensus target price of $37.50, indicating a potential upside of 12.88%. Hanover Bancorp has a consensus target price of $21.00, indicating a potential upside of 24.26%. Given Hanover Bancorp’s stronger consensus rating and higher probable upside, analysts plainly believe Hanover Bancorp is more favorable than German American Bancorp.

Insider and Institutional Ownership

46.9% of German American Bancorp shares are owned by institutional investors. Comparatively, 15.0% of Hanover Bancorp shares are owned by institutional investors. 4.6% of German American Bancorp shares are owned by insiders. Comparatively, 24.8% of Hanover Bancorp shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Dividends

German American Bancorp pays an annual dividend of $1.08 per share and has a dividend yield of 3.3%. Hanover Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 2.4%. German American Bancorp pays out 37.0% of its earnings in the form of a dividend. Hanover Bancorp pays out 20.4% 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. German American Bancorp has increased 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.

Summary

German American Bancorp beats Hanover Bancorp on 12 of the 16 factors compared between the two stocks.

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.

About Hanover Bancorp

Hanover Bancorp, Inc., a bank holding company for Hanover Community Bank, provides personal and business lending and deposit services to businesses, municipalities, and individuals in the New York metro area. The company offers checking, credit cards, debit cards, money market, savings, government and municipal banking, and professional services, as well as time deposits, including certificate of deposit and individual retirement accounts. It also provides business loans, commercial real estate financing, small business administration, lending directory services, and residential mortgage. In addition, the company offers cash management, online and mobile banking, merchant services, and digital solutions. Its banking offices are located in Nassau, Suffolk, Queens, Kings, New York Counties, New York, Monmouth County, Freehold, and New Jersey. The company was founded in 2008 and is headquartered in Mineola, New York.