First Interstate BancSystem (NASDAQ:FIBK) & Horizon Bancorp (NASDAQ:HBNC) Head-To-Head Analysis

Horizon Bancorp (NASDAQ:HBNC) and First Interstate BancSystem (NASDAQ:FIBK) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their risk, profitability, dividends, institutional ownership, valuation, earnings and analyst recommendations.

Risk and Volatility

Horizon Bancorp has a beta of 1.04, meaning that its share price is 4% more volatile than the S&P 500. Comparatively, First Interstate BancSystem has a beta of 0.85, meaning that its share price is 15% less volatile than the S&P 500.

Insider & Institutional Ownership

64.5% of Horizon Bancorp shares are held by institutional investors. Comparatively, 88.7% of First Interstate BancSystem shares are held by institutional investors. 2.8% of Horizon Bancorp shares are held by insiders. Comparatively, 6.9% of First Interstate BancSystem shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Horizon Bancorp and First Interstate BancSystem’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Horizon Bancorp	$324.30 million	1.73	$27.98 million	$0.54	23.50
First Interstate BancSystem	$1.01 billion	2.85	$257.50 million	$2.51	11.05

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

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Horizon Bancorp and First Interstate BancSystem, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Horizon Bancorp	0	2	1	0	2.33
First Interstate BancSystem	0	3	2	0	2.40

Horizon Bancorp presently has a consensus target price of $12.50, indicating a potential downside of 1.50%. First Interstate BancSystem has a consensus target price of $30.20, indicating a potential upside of 8.91%. Given First Interstate BancSystem’s stronger consensus rating and higher possible upside, analysts clearly believe First Interstate BancSystem is more favorable than Horizon Bancorp.

Profitability

This table compares Horizon Bancorp and First Interstate BancSystem’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Horizon Bancorp	7.02%	8.75%	0.78%
First Interstate BancSystem	18.04%	8.55%	0.88%

Dividends

Horizon Bancorp pays an annual dividend of $0.64 per share and has a dividend yield of 5.0%. First Interstate BancSystem pays an annual dividend of $1.88 per share and has a dividend yield of 6.8%. Horizon Bancorp pays out 118.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. First Interstate BancSystem pays out 74.9% of its earnings in the form of a dividend. First Interstate BancSystem is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

First Interstate BancSystem beats Horizon Bancorp on 13 of the 16 factors compared between the two stocks.

About Horizon Bancorp

Horizon Bancorp, Inc. operates as the bank holding company for Horizon Bank that engages in the provision of commercial and retail banking services. The company offers checking, saving, money market, certificate of deposits, individual retirement accounts, and time deposits, as well as non-interest- and interest-bearing demand deposits. It also provides commercial, residential real estate, mortgage, home equity, auto, personal, business, agricultural, and SBA loans, as well as credit cards. In addition, the company offers corporate and individual trust and agency, investment management, and real estate investment trust services; debit cards; treasury management; online and mobile banking; wealth, retirement, and estate and trust services; and sells various insurance products. It operates through full-service offices in northern and central Indiana and southern and central Michigan. Horizon Bancorp, Inc. was founded in 1873 and is headquartered in Michigan City, Indiana.

About First Interstate BancSystem

First Interstate BancSystem, Inc. operates as the bank holding company for First Interstate Bank that provides range of banking products and services in the United States. It offers various traditional depository products, including checking, savings, and time deposits; and repurchase agreements primarily for commercial and municipal depositors. The company also offers real estate loans comprising commercial real estate, construction, residential, agricultural, and other real estate loans; consumer loans comprising direct personal loans, credit card loans and lines of credit, and indirect loans; variable and fixed rate commercial loans for small and medium-sized manufacturing, wholesale, retail, and service businesses for working capital needs and business expansions; and agricultural loans. In addition, it provides a range of trust, employee benefit, investment management, insurance, agency, and custodial services to individuals, businesses, and nonprofit organizations. Further, the company offers marketing, credit review, loan servicing, credit cards issuance and servicing, mortgage loan sales and servicing, indirect consumer loan purchasing and processing, loan collection services, other operational, and specialized staff support services, as well as online and mobile banking services. The company serves individuals, businesses, municipalities, and other entities in various industries, including agriculture, construction, education, governmental services, healthcare, hospitality, housing, professional services, real estate development, retail, technology, tourism, and wholesale trade. First Interstate BancSystem, Inc. was incorporated in 1971 and is headquartered in Billings, Montana.