Head-To-Head Analysis: Horizon Bancorp (IN) (NASDAQ:HBNC) and Harleysville Savings Financial (OTCMKTS:HARL)

Horizon Bancorp (IN) (NASDAQ:HBNC) and Harleysville Savings Financial (OTCMKTS:HARL) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, risk, dividends, valuation and analyst recommendations.

Dividends

Horizon Bancorp (IN) pays an annual dividend of $0.64 per share and has a dividend yield of 3.3%. Harleysville Savings Financial pays an annual dividend of $1.40 per share and has a dividend yield of 4.8%. Horizon Bancorp (IN) pays out -20.1% of its earnings in the form of a dividend. Harleysville Savings Financial pays out 42.8% 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.

Earnings and Valuation

This table compares Horizon Bancorp (IN) and Harleysville Savings Financial”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Horizon Bancorp (IN)	$405.46 million	2.49	-$150.48 million	($3.18)	-6.19
Harleysville Savings Financial	$43.61 million	2.36	$9.53 million	$3.27	8.84

Harleysville Savings Financial has lower revenue, but higher earnings than Horizon Bancorp (IN). Horizon Bancorp (IN) is trading at a lower price-to-earnings ratio than Harleysville Savings Financial, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Horizon Bancorp (IN) and Harleysville Savings Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Horizon Bancorp (IN)	0	3	2	0	2.40
Harleysville Savings Financial	0	0	0	0	0.00

Horizon Bancorp (IN) currently has a consensus price target of $20.67, indicating a potential upside of 5.01%. Given Horizon Bancorp (IN)’s stronger consensus rating and higher possible upside, analysts clearly believe Horizon Bancorp (IN) is more favorable than Harleysville Savings Financial.

Profitability

This table compares Horizon Bancorp (IN) and Harleysville Savings Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Horizon Bancorp (IN)	-37.28%	12.41%	1.29%
Harleysville Savings Financial	24.73%	12.99%	1.28%

Insider and Institutional Ownership

64.5% of Horizon Bancorp (IN) shares are owned by institutional investors. Comparatively, 1.2% of Harleysville Savings Financial shares are owned by institutional investors. 1.2% of Horizon Bancorp (IN) shares are owned by company insiders. Comparatively, 14.5% of Harleysville Savings Financial shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Risk and Volatility

Horizon Bancorp (IN) has a beta of 0.83, indicating that its stock price is 17% less volatile than the S&P 500. Comparatively, Harleysville Savings Financial has a beta of 0.23, indicating that its stock price is 77% less volatile than the S&P 500.

Summary

Horizon Bancorp (IN) beats Harleysville Savings Financial on 9 of the 16 factors compared between the two stocks.

About Horizon Bancorp (IN)

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 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.