Contrasting Northeast Indiana Bancorp (OTCMKTS:NIDB) and Bancorp 34 (OTCMKTS:BCTF)

Northeast Indiana Bancorp (OTCMKTS:NIDB) and Bancorp 34 (OTCMKTS:BCTF) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their risk, valuation, analyst recommendations, profitability, earnings, dividends and institutional ownership.

Insider and Institutional Ownership

6.5% of Bancorp 34 shares are held by institutional investors. 19.8% of Northeast Indiana Bancorp shares are held by company insiders. Comparatively, 7.4% of Bancorp 34 shares are held 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 Recommendations

This is a summary of current ratings for Northeast Indiana Bancorp and Bancorp 34, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Northeast Indiana Bancorp	0	0	0	0	N/A
Bancorp 34	0	0	0	0	N/A

Dividends

Northeast Indiana Bancorp pays an annual dividend of $0.68 per share and has a dividend yield of 3.9%. Bancorp 34 pays an annual dividend of $0.28 per share and has a dividend yield of 2.3%. Northeast Indiana Bancorp pays out 33.2% of its earnings in the form of a dividend. Bancorp 34 pays out -56.0% 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.

Risk and Volatility

Northeast Indiana Bancorp has a beta of 0.4, meaning that its stock price is 60% less volatile than the S&P 500. Comparatively, Bancorp 34 has a beta of 0.32, meaning that its stock price is 68% less volatile than the S&P 500.

Earnings and Valuation

This table compares Northeast Indiana Bancorp and Bancorp 34″s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Northeast Indiana Bancorp	$27.36 million	1.54	$4.26 million	$2.05	8.53
Bancorp 34	$28.85 million	2.83	-$3.40 million	($0.50)	-24.70

Northeast Indiana Bancorp has higher earnings, but lower revenue than Bancorp 34. Bancorp 34 is trading at a lower price-to-earnings ratio than Northeast Indiana Bancorp, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Northeast Indiana Bancorp and Bancorp 34’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Northeast Indiana Bancorp	14.16%	N/A	N/A
Bancorp 34	-4.02%	-2.38%	-0.22%

Summary

Northeast Indiana Bancorp beats Bancorp 34 on 9 of the 13 factors compared between the two stocks.

About Northeast Indiana Bancorp

Northeast Indiana Bancorp, Inc. operates as the bank holding company for First Federal Savings Bank that provides various banking and financial advisory services. The company offers checking accounts, savings accounts, retirement accounts, health savings accounts, and direct deposits, as well as certificates of deposit. It also provides mortgage, refinance, new construction, and home equity loans; auto, recreational vehicle, and unsecured loans; and revolving lines of credit, term loans, real estate loans, letter of credit, and small business administration loans, as well as debit and credit cards. In addition, the company offers merchant, online banking, and cash management services. It operates through full-service locations in Huntington, Warsaw, and Fort Wayne, Indiana. The company was founded in 1912 and is headquartered in Huntington, Indiana.

About Bancorp 34

Bancorp 34, Inc. operates as the holding company for Bank 34 that offers various banking products and services to individuals and businesses in the United States. It accepts various deposit products, such as savings accounts, checking accounts, money market accounts, demand and time deposits, NOW accounts, and individual retirement accounts, as well as certificates of deposit. The company also provides term, working capital, construction, USDA, small business administration, equipment, assisted living and skilled nursing, renewable energy and solar equipment, and commercial real estate loans; and small to medium size business and business acquisitions financing; lines of credit; multi-family finance; and employee stock ownership plans, HOA lending, and investor pools of single family rentals. In addition, it offers credit and debit cards; safe deposit boxes; treasury management products; and merchant card processing, cash management, e-banking, mobile and online banking, bill payment, and merchant capture services. The company operates through its network of full-service branches in Scottsdale and Arizona, as well as Alamogordo and Las Cruces, New Mexico. Bancorp 34, Inc. was founded in 1934 and is headquartered in Scottsdale, Arizona.