Critical Comparison: Surrey Bancorp (OTCMKTS:SRYB) and German American Bancorp (NASDAQ:GABC)

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

Earnings & Valuation

This table compares Surrey Bancorp and German American Bancorp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Surrey Bancorp	$16.20 million	4.23	$5.10 million	$1.52	10.99
German American Bancorp	$253.25 million	4.73	$83.81 million	$2.82	14.30

German American Bancorp has higher revenue and earnings than Surrey Bancorp. Surrey 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.

Analyst Recommendations

This is a summary of current ratings and price targets for Surrey Bancorp and German American Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Surrey Bancorp	0	0	0	0	0.00
German American Bancorp	0	2	3	0	2.60

German American Bancorp has a consensus target price of $46.40, indicating a potential upside of 15.05%. Given German American Bancorp’s stronger consensus rating and higher probable upside, analysts plainly believe German American Bancorp is more favorable than Surrey Bancorp.

Volatility & Risk

Surrey Bancorp has a beta of 0.65, meaning that its stock price is 35% less volatile than the S&P 500. Comparatively, German American Bancorp has a beta of 0.64, meaning that its stock price is 36% less volatile than the S&P 500.

Institutional and Insider Ownership

3.7% of Surrey Bancorp shares are owned by institutional investors. Comparatively, 46.9% of German American Bancorp shares are owned by institutional investors. 33.7% of Surrey Bancorp shares are owned by insiders. Comparatively, 6.2% of German American Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Surrey Bancorp	37.97%	N/A	N/A
German American Bancorp	23.69%	12.04%	1.35%

Dividends

Surrey Bancorp pays an annual dividend of $0.48 per share and has a dividend yield of 2.9%. German American Bancorp pays an annual dividend of $1.16 per share and has a dividend yield of 2.9%. Surrey Bancorp pays out 31.6% of its earnings in the form of a dividend. German American Bancorp pays out 41.1% 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 raised its dividend for 13 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 Surrey Bancorp on 13 of the 17 factors compared between the two stocks.

About Surrey Bancorp

Surrey BanCorp engages in the provision of banking solutions through its subsidiaries, Surrey Bank & Trust . It offers checking accounts, savings, deposit services, mortgages, real estate loans, commercial credit products, business checking, and electronic banking. The company was founded on May 1, 2003 and is headquartered in Mount Airy, NC.

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.