Head-To-Head Analysis: German American Bancorp (NASDAQ:GABC) and Amalgamated Financial (NASDAQ:AMAL)

German American Bancorp (NASDAQ:GABC) and Amalgamated Financial (NASDAQ:AMAL) 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.

Risk and Volatility

German American Bancorp has a beta of 0.62, indicating that its stock price is 38% less volatile than the S&P 500. Comparatively, Amalgamated Financial has a beta of 0.94, indicating that its stock price is 6% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
German American Bancorp	25.83%	13.68%	1.38%
Amalgamated Financial	23.22%	16.34%	1.17%

Insider and Institutional Ownership

46.9% of German American Bancorp shares are owned by institutional investors. Comparatively, 75.9% of Amalgamated Financial shares are owned by institutional investors. 6.2% of German American Bancorp shares are owned by company insiders. Comparatively, 0.9% of Amalgamated 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.

Analyst Ratings

This is a breakdown of current recommendations and price targets for German American Bancorp and Amalgamated Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
German American Bancorp	0	2	1	0	2.33
Amalgamated Financial	0	0	3	0	3.00

German American Bancorp currently has a consensus price target of $36.33, indicating a potential downside of 1.11%. Amalgamated Financial has a consensus price target of $30.50, indicating a potential upside of 7.13%. Given Amalgamated Financial’s stronger consensus rating and higher possible upside, analysts clearly believe Amalgamated Financial is more favorable than German American Bancorp.

Earnings & Valuation

This table compares German American Bancorp and Amalgamated Financial’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
German American Bancorp	$316.92 million	3.44	$85.89 million	$2.85	12.89
Amalgamated Financial	$387.41 million	2.24	$87.98 million	$3.06	9.30

Amalgamated Financial has higher revenue and earnings than German American Bancorp. Amalgamated Financial 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.

Dividends

German American Bancorp pays an annual dividend of $1.08 per share and has a dividend yield of 2.9%. Amalgamated Financial pays an annual dividend of $0.48 per share and has a dividend yield of 1.7%. German American Bancorp pays out 37.9% of its earnings in the form of a dividend. Amalgamated Financial pays out 15.7% 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

Amalgamated Financial beats German American Bancorp on 10 of the 17 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 Amalgamated Financial

Amalgamated Financial Corp. operates as the bank holding company for Amalgamated Bank that provides commercial and retail banking, investment management, and trust and custody services for commercial and retail customers in the United States. The company accepts various deposit products, including non-interest bearing accounts, interest-bearing demand products, savings accounts, money market accounts, NOW accounts, and certificates of deposit. It also provides various commercial loans comprising commercial and industrial, multifamily mortgage, and commercial real estate loans; residential mortgage loans; and retail loans, such as residential real estate, consumer solar, and consumer and other loans. In addition, the company offers online banking, bill payment, online cash management, and safe deposit box rental services; debit and ATM cards; and trust, custody, and investment management services comprising asset safekeeping, corporate actions, income collections, proxy, account transition, asset transfers, and conversion management services. Further, it provides investment products, such as funds spanning equity, fixed-income, real estate, and alternative investment products; and brokerage, asset management, and insurance products. Amalgamated Financial Corp. was founded in 1923 and is headquartered in New York, New York.