Critical Review: TrustCo Bank Corp NY (NASDAQ:TRST) and Horizon Bancorp (NASDAQ:HBNC)

TrustCo Bank Corp NY (NASDAQ:TRST) and Horizon Bancorp (NASDAQ:HBNC) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, valuation, dividends, institutional ownership, earnings, risk and analyst recommendations.

Volatility and Risk

TrustCo Bank Corp NY has a beta of 0.82, indicating that its share price is 18% less volatile than the S&P 500. Comparatively, Horizon Bancorp has a beta of 1.04, indicating that its share price is 4% more volatile than the S&P 500.

Dividends

TrustCo Bank Corp NY pays an annual dividend of $1.44 per share and has a dividend yield of 4.4%. Horizon Bancorp pays an annual dividend of $0.64 per share and has a dividend yield of 4.3%. TrustCo Bank Corp NY pays out 51.6% of its earnings in the form of a dividend. Horizon Bancorp pays out 118.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Horizon Bancorp has increased its dividend for 13 consecutive years. TrustCo Bank Corp NY is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares TrustCo Bank Corp NY and Horizon Bancorp”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TrustCo Bank Corp NY	$244.52 million	2.53	$58.65 million	$2.79	11.66
Horizon Bancorp	$180.49 million	3.65	$27.98 million	$0.54	27.65

TrustCo Bank Corp NY has higher revenue and earnings than Horizon Bancorp. TrustCo Bank Corp NY is trading at a lower price-to-earnings ratio than Horizon Bancorp, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current recommendations and price targets for TrustCo Bank Corp NY and Horizon Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TrustCo Bank Corp NY	0	0	0	0	N/A
Horizon Bancorp	0	2	1	0	2.33

Horizon Bancorp has a consensus target price of $15.33, suggesting a potential upside of 2.70%. Given Horizon Bancorp’s higher probable upside, analysts plainly believe Horizon Bancorp is more favorable than TrustCo Bank Corp NY.

Institutional and Insider Ownership

68.6% of TrustCo Bank Corp NY shares are owned by institutional investors. Comparatively, 64.5% of Horizon Bancorp shares are owned by institutional investors. 3.3% of TrustCo Bank Corp NY shares are owned by company insiders. Comparatively, 2.8% of Horizon Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares TrustCo Bank Corp NY and Horizon Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TrustCo Bank Corp NY	19.22%	7.65%	0.80%
Horizon Bancorp	5.50%	8.17%	0.74%

Summary

TrustCo Bank Corp NY beats Horizon Bancorp on 9 of the 16 factors compared between the two stocks.

About TrustCo Bank Corp NY

TrustCo Bank Corp NY operates as the holding company for Trustco Bank, a federal savings bank that provides personal and business banking services to individuals and businesses. The company accepts deposits; and offers loans and investments. It also operates as a real estate investment trust that acquires, holds, and manages real estate mortgage assets, including residential mortgage loans and mortgage-backed securities. In addition, the company serves as the executor of estates and trustee of personal trusts; provides asset and wealth management, estate planning and related advice, and custodial services; and acts as trustee for various types of employee benefit plans, and corporate pension and profit-sharing trusts. It operates through banking offices in Albany, Columbia, Dutchess, Greene, Montgomery, Orange, Putnam, Rensselaer, Rockland, Saratoga, Schenectady, Schoharie, Ulster, Warren, Washington, and Westchester counties of New York; Brevard, Charlotte, Flagler, Hillsborough, Indian River, Lake, Manatee, Martin, Orange, Osceola, Palm Beach, Polk, Sarasota, Seminole, and Volusia counties in Florida; Bennington County in Vermont; Berkshire County in Massachusetts; and Bergen County in New Jersey, as well as automatic teller machines. The company was founded in 1902 and is headquartered in Glenville, New York.

About Horizon Bancorp

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.