Financial Review: Independent Bank (INDB) versus Cambridge Bancorp (CATC)

Independent Bank (NASDAQ:INDB) and Cambridge Bancorp (NASDAQ:CATC) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, earnings, risk, dividends, analyst recommendations, institutional ownership and valuation.

Profitability

This table compares Independent Bank and Cambridge Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Independent Bank 28.75% 12.21% 1.44%
Cambridge Bancorp 19.75% 15.22% 1.19%

Valuation and Earnings

This table compares Independent Bank and Cambridge Bancorp’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Independent Bank $360.19 million 6.05 $87.20 million $3.35 23.59
Cambridge Bancorp $91.42 million 3.96 $14.81 million N/A N/A

Independent Bank has higher revenue and earnings than Cambridge Bancorp.

Insider and Institutional Ownership

80.9% of Independent Bank shares are owned by institutional investors. Comparatively, 37.2% of Cambridge Bancorp shares are owned by institutional investors. 2.7% of Independent Bank shares are owned by company insiders. Comparatively, 3.3% of Cambridge Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Volatility and Risk

Independent Bank has a beta of 0.96, suggesting that its stock price is 4% less volatile than the S&P 500. Comparatively, Cambridge Bancorp has a beta of 0.04, suggesting that its stock price is 96% less volatile than the S&P 500.

Dividends

Independent Bank pays an annual dividend of $1.52 per share and has a dividend yield of 1.9%. Cambridge Bancorp pays an annual dividend of $2.00 per share and has a dividend yield of 2.3%. Independent Bank pays out 45.4% of its earnings in the form of a dividend. Independent Bank has increased its dividend for 7 consecutive years.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Independent Bank and Cambridge Bancorp, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Independent Bank 0 2 2 0 2.50
Cambridge Bancorp 0 0 0 0 N/A

Independent Bank presently has a consensus target price of $84.00, suggesting a potential upside of 6.28%. Given Independent Bank’s higher possible upside, research analysts plainly believe Independent Bank is more favorable than Cambridge Bancorp.

Summary

Independent Bank beats Cambridge Bancorp on 11 of the 15 factors compared between the two stocks.

Independent Bank Company Profile

Independent Bank Corp. operates as the bank holding company for Rockland Trust Company that provides commercial banking products and services to individuals and small-to-medium sized businesses primarily in Massachusetts. The company's products and services include demand deposits and time certificates of deposit, as well as checking, money market, and savings accounts. Its loan portfolio includes commercial loans, such as commercial and industrial, asset-based, commercial real estate, commercial construction, and small business loans; consumer real estate loans, including residential mortgages, home equity loans, and loans for the construction of residential properties; and other consumer loans, such as personal loans. The company's commercial and industrial loans cover loans for working capital, other business-related purposes, and floor plan financing; asset-based loans consist primarily of revolving lines of credit and term loans; commercial real estate loans include commercial mortgages for construction purposes that are secured by nonresidential properties, multifamily properties, or one-to-four family rental properties; and small business loans comprise businesses with commercial credit needs. It also provides investment management and trust services to individuals, institutions, small businesses, and charitable institutions; Internet and mobile banking services, as well as automated teller machine cards and debit cards; and mutual fund shares, unit investment trust shares, general securities, fixed and variable annuities, and life insurance. The company operates through 84 full service and 2 limited service retail branches, 13 commercial banking centers, 6 investment management offices, and 1 mortgage lending center in Eastern Massachusetts; and an investment management group/commercial lending office in Rhode Island. Independent Bank Corp. was founded in 1907 and is headquartered in Rockland, Massachusetts.

Cambridge Bancorp Company Profile

Cambridge Bancorp operates as the bank holding company for Cambridge Trust Company that provides commercial and consumer banking, and investment management and trust services. The company accepts various deposits, such as checking and savings accounts, certificates of deposit, money market accounts, individual retirement accounts, and time and demand deposits. Its loans products include residential and commercial real estate loans; home equity lines of credit and term loans; commercial and industrial loans; secured and unsecured loans, lines of credit, and personal installment loans; and construction loans. The company also offers cash management, online and mobile banking, and payments services. It serves commercial enterprises, non-profit organizations, and individuals. The company operates 10 Massachusetts locations in Cambridge, Boston, Belmont, Concord, Lexington, and Weston; and wealth management offices in Boston, Massachusetts, as well as in Concord, Manchester, and Portsmouth, New Hampshire. Cambridge Bancorp was founded in 1890 and is headquartered in Cambridge, Massachusetts.

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