Head-To-Head Review: Old Second Bancorp (NASDAQ:OSBC) & M&T Bank (NYSE:MTB)

Old Second Bancorp (NASDAQ:OSBCGet Free Report) and M&T Bank (NYSE:MTBGet Free Report) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, profitability, dividends, valuation, analyst recommendations, institutional ownership and risk.

Volatility and Risk

Old Second Bancorp has a beta of 1.08, meaning that its share price is 8% more volatile than the S&P 500. Comparatively, M&T Bank has a beta of 0.78, meaning that its share price is 22% less volatile than the S&P 500.

Dividends

Old Second Bancorp pays an annual dividend of $0.20 per share and has a dividend yield of 1.4%. M&T Bank pays an annual dividend of $5.40 per share and has a dividend yield of 3.7%. Old Second Bancorp pays out 10.2% of its earnings in the form of a dividend. M&T Bank pays out 36.5% 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.

Analyst Ratings

This is a breakdown of current ratings and target prices for Old Second Bancorp and M&T Bank, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Old Second Bancorp 0 0 2 1 3.33
M&T Bank 0 9 5 0 2.36

Old Second Bancorp presently has a consensus price target of $17.67, suggesting a potential upside of 26.37%. M&T Bank has a consensus price target of $159.79, suggesting a potential upside of 8.83%. Given Old Second Bancorp’s stronger consensus rating and higher possible upside, research analysts clearly believe Old Second Bancorp is more favorable than M&T Bank.

Profitability

This table compares Old Second Bancorp and M&T Bank’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Old Second Bancorp 26.90% 16.36% 1.58%
M&T Bank 19.52% 10.68% 1.25%

Earnings and Valuation

This table compares Old Second Bancorp and M&T Bank’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Old Second Bancorp $279.77 million 2.24 $91.73 million $1.97 7.10
M&T Bank $12.75 billion 1.92 $2.74 billion $14.79 9.93

M&T Bank has higher revenue and earnings than Old Second Bancorp. Old Second Bancorp is trading at a lower price-to-earnings ratio than M&T Bank, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

67.8% of Old Second Bancorp shares are owned by institutional investors. Comparatively, 84.7% of M&T Bank shares are owned by institutional investors. 3.8% of Old Second Bancorp shares are owned by company insiders. Comparatively, 0.8% of M&T Bank shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Old Second Bancorp beats M&T Bank on 10 of the 17 factors compared between the two stocks.

About Old Second Bancorp

(Get Free Report)

Old Second Bancorp, Inc. operates as the bank holding company for Old Second National Bank that provides community banking services. It offers demand, NOW, money market, savings, time deposit, individual retirement, and checking accounts, as well as certificates of deposit accounts. The company also provides commercial loans; lease financing receivables; commercial real estate loans; construction loans; residential real estate loans, such as residential first mortgage and second mortgage loans; home equity line of credit; consumer loans, including motor vehicle, home improvement, and signature loans; installment and agricultural loans; residential mortgages; and overdraft checking. In addition, it offers safe deposit services; trust and wealth management services; and money orders, cashier's checks, foreign currency, direct deposits, discount brokerage, debit and credit cards, and other services, as well as acquires the U.S. treasury notes and bonds. Further, the company provides online and mobile banking; corporate cash management products, including remote and mobile deposits capture, investment sweep accounts, zero balance accounts, automated tax payments, automatic teller machines access, telephone banking, lockbox accounts, automated clearing house transactions, account reconciliation, controlled disbursement, detail and general information reporting, foreign and domestic wire transfers, and vault services for currency and coin; and investment, agency, and custodial services for individual, corporate, and not-for-profit clients. Old Second Bancorp, Inc. was incorporated in 1981 and is headquartered in Aurora, Illinois.

About M&T Bank

(Get Free Report)

M&T Bank Corporation operates as a bank holding company for Manufacturers and Traders Trust Company and Wilmington Trust, National Association that engages in the provision of retail and commercial banking products and services in the United States. The company operates through three segments: Commercial Bank, Retail Bank, and Institutional Services and Wealth Management. It offers a range of credit products and banking services, such as commercial lending and leasing, letters of credits, commercial real estate loans, and credit facilities secured by various commercial real estate to middle-market and large commercial customers. The company also provides customers deposit products, including demand, savings and time accounts, and other services; automobile and recreational finance loans, home equity loans and lines of credit, credit cards, and other loan products, as well as residential mortgage and real estate loans; business loans, cash management, payroll, and direct deposit services to consumers and small businesses through branch network, telephone banking, internet banking, and automated teller machines. In addition, it offers trustee, agency, investment management, security brokerage, and administrative services; personal trust, planning, fiduciary, asset management, family office, and other services; and investment products, including mutual funds and annuities, and other services for corporations and institutions, investment bankers, corporate tax, finance and legal executives, and other institutional clients. The company was founded in 1856 and is headquartered in Buffalo, New York.

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