Old Second Bancorp (NASDAQ: OSBC) and Independent Bank Corp. (NASDAQ:INDB) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, profitability, dividends, valuation, analyst recommendations, risk and earnings.
Institutional and Insider Ownership
65.6% of Old Second Bancorp shares are held by institutional investors. Comparatively, 76.5% of Independent Bank Corp. shares are held by institutional investors. 3.6% of Old Second Bancorp shares are held by insiders. Comparatively, 2.7% of Independent Bank Corp. shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Earnings and Valuation
This table compares Old Second Bancorp and Independent Bank Corp.’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Old Second Bancorp||$97.41 million||3.83||$18.37 million||$0.62||20.32|
|Independent Bank Corp.||$316.23 million||6.32||$80.39 million||$2.93||24.85|
Independent Bank Corp. has higher revenue and earnings than Old Second Bancorp. Old Second Bancorp is trading at a lower price-to-earnings ratio than Independent Bank Corp., indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Old Second Bancorp has a beta of 1.33, indicating that its stock price is 33% more volatile than the S&P 500. Comparatively, Independent Bank Corp. has a beta of 1, indicating that its stock price has a similar volatility profile to the S&P 500.
Old Second Bancorp pays an annual dividend of $0.04 per share and has a dividend yield of 0.3%. Independent Bank Corp. pays an annual dividend of $1.28 per share and has a dividend yield of 1.8%. Old Second Bancorp pays out 6.5% of its earnings in the form of a dividend. Independent Bank Corp. pays out 43.7% 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.
This table compares Old Second Bancorp and Independent Bank Corp.’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Old Second Bancorp||16.82%||10.30%||0.82%|
|Independent Bank Corp.||23.17%||9.70%||1.09%|
This is a breakdown of current recommendations and price targets for Old Second Bancorp and Independent Bank Corp., as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Old Second Bancorp||0||2||0||0||2.00|
|Independent Bank Corp.||0||3||1||0||2.25|
Old Second Bancorp presently has a consensus target price of $12.25, indicating a potential downside of 2.78%. Independent Bank Corp. has a consensus target price of $68.67, indicating a potential downside of 5.68%. Given Old Second Bancorp’s higher possible upside, research analysts plainly believe Old Second Bancorp is more favorable than Independent Bank Corp..
Independent Bank Corp. beats Old Second Bancorp on 11 of the 16 factors compared between the two stocks.
About Old Second Bancorp
Old Second Bancorp, Inc. is a bank holding company. The Company conducts a full service community banking and trust business through its subsidiaries, including Old Second National Bank (the Bank), Old Second Capital Trust I, Old Second Capital Trust II and Old Second Affordable Housing Fund, L.L.C. The Bank’s full service banking businesses include the customary consumer and commercial products and services that banking institutions provide, including demand, negotiable order of withdrawal, money market and individual retirement accounts; commercial, industrial, consumer and real estate lending, including installment loans, agricultural loans, lines of credit and overdraft checking; safe deposit operations, and a range of additional services tailored to the needs of individual customers, such as the acquisition of the United States Treasury notes and bonds, money orders, cashiers’ checks and foreign currency, direct deposit, debit cards, credit cards and other special services.
About Independent Bank Corp.
Independent Bank Corp. is a bank holding company. The Company operates through its subsidiary, Rockland Trust Company (the Bank). The Bank is a community-oriented commercial bank. Its community banking business provides a range of banking services, including lending activities, acceptance of demand, savings, and time deposits, and investment management. As of December 31, 2016, the bank had operated 80 full service and three limited service retail branches, 11 commercial banking centers, five investment management offices and one mortgage lending center, all of which located in Eastern Massachusetts. The Bank classifies loans as commercial loans, consumer real estate loans, or other consumer loans. Commercial loans consist of commercial and industrial loans, commercial real estate loans, commercial construction loans, and small business loans. The Bank offers a range of demand deposits, interest checking, money market accounts, savings accounts and time certificates of deposit.
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