Financial Comparison: Independent Bank Co.(MI) (IBCP) vs. Banco Bradesco (BBD)

Independent Bank Co.(MI) (NASDAQ: IBCP) and Banco Bradesco (NYSE:BBD) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, risk, earnings, profitability, dividends, valuation and institutional ownership.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Independent Bank Co.(MI) and Banco Bradesco, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Independent Bank Co.(MI) 0 3 0 0 2.00
Banco Bradesco 0 1 3 0 2.75

Independent Bank Co.(MI) presently has a consensus price target of $22.50, suggesting a potential upside of 0.67%. Banco Bradesco has a consensus price target of $12.40, suggesting a potential upside of 22.89%. Given Banco Bradesco’s stronger consensus rating and higher possible upside, analysts clearly believe Banco Bradesco is more favorable than Independent Bank Co.(MI).

Volatility and Risk

Independent Bank Co.(MI) has a beta of 0.7, indicating that its share price is 30% less volatile than the S&P 500. Comparatively, Banco Bradesco has a beta of 1.72, indicating that its share price is 72% more volatile than the S&P 500.

Earnings & Valuation

This table compares Independent Bank Co.(MI) and Banco Bradesco’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Independent Bank Co.(MI) $128.82 million 3.70 $22.76 million $1.14 19.61
Banco Bradesco $46.77 billion 1.44 $4.32 billion $0.75 13.45

Banco Bradesco has higher revenue and earnings than Independent Bank Co.(MI). Banco Bradesco is trading at a lower price-to-earnings ratio than Independent Bank Co.(MI), indicating that it is currently the more affordable of the two stocks.

Dividends

Independent Bank Co.(MI) pays an annual dividend of $0.48 per share and has a dividend yield of 2.1%. Banco Bradesco pays an annual dividend of $0.06 per share and has a dividend yield of 0.6%. Independent Bank Co.(MI) pays out 42.1% of its earnings in the form of a dividend. Banco Bradesco pays out 8.0% 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. Independent Bank Co.(MI) has increased its dividend for 3 consecutive years. Independent Bank Co.(MI) is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Independent Bank Co.(MI) and Banco Bradesco’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Independent Bank Co.(MI) 17.75% 9.52% 0.93%
Banco Bradesco 9.17% 17.71% 1.57%

Institutional and Insider Ownership

81.7% of Independent Bank Co.(MI) shares are owned by institutional investors. Comparatively, 2.7% of Banco Bradesco shares are owned by institutional investors. 5.7% of Independent Bank Co.(MI) shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

Banco Bradesco beats Independent Bank Co.(MI) on 9 of the 17 factors compared between the two stocks.

About Independent Bank Co.(MI)

Independent Bank Corporation is a bank holding company. The Company owns all of the outstanding stock of Independent Bank (the Bank). The Bank focuses on commercial banking industry. The Bank offers a range of banking services to individuals and businesses, including checking and savings accounts, commercial lending, direct and indirect consumer financing, mortgage lending and safe deposit box services. The Company’s principal markets are the rural and suburban communities across lower Michigan. As of December 31, 2016, the Company’s markets were served by the Bank’s main office in Grand Rapids, Michigan, and a total of 62 branches, a drive-in facility and 12 loan production offices. The Bank’s branches provide lobby and drive-in services, as well as automatic teller machines (ATMs). Its Bank also offers title insurance services through a subsidiary, and investment and insurance services through a third party agreement with Cetera Investment Services LLC.

About Banco Bradesco

Banco Bradesco S.A. is a commercial bank. The Bank offers a range of banking and financial products and services in Brazil and abroad to individuals, large, mid-sized and small companies, and local and international corporations and institutions. Its segments include Financial; Insurance and Capitalization bonds; Pension plans, and Other Activities. The Financial segment consists of financial institutions and holding companies, which are responsible for managing financial resources, and credit card, consortium and asset management companies. The Insurance Group segment comprises insurance, pension plan and capitalization bond companies. It offers banking services, including deposit-taking activities, individual and corporate banking services, credit and debit cards, leasing operations, investment banking, asset management, consortium services and others. Its insurance services include health insurance, life and personal accident insurance, automobile, casualty and pension plans.

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