Contrasting State Street (NYSE:STT) & Midland States Bancorp (NASDAQ:MSBI)

Midland States Bancorp (NASDAQ:MSBI) and State Street (NYSE:STT) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their profitability, risk, institutional ownership, earnings, valuation, dividends and analyst recommendations.

Institutional & Insider Ownership

60.9% of Midland States Bancorp shares are owned by institutional investors. Comparatively, 87.4% of State Street shares are owned by institutional investors. 5.6% of Midland States Bancorp shares are owned by insiders. Comparatively, 0.3% of State Street shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Risk & Volatility

Midland States Bancorp has a beta of 0.76, suggesting that its share price is 24% less volatile than the S&P 500. Comparatively, State Street has a beta of 1.43, suggesting that its share price is 43% more volatile than the S&P 500.

Dividends

Midland States Bancorp pays an annual dividend of $1.24 per share and has a dividend yield of 5.3%. State Street pays an annual dividend of $3.04 per share and has a dividend yield of 3.1%. Midland States Bancorp pays out 53.7% of its earnings in the form of a dividend. State Street pays out 48.0% 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.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Midland States Bancorp and State Street, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Midland States Bancorp	0	3	0	0	2.00
State Street	2	6	7	0	2.33

Midland States Bancorp currently has a consensus price target of $27.33, indicating a potential upside of 17.06%. State Street has a consensus price target of $100.33, indicating a potential upside of 2.65%. Given Midland States Bancorp’s higher probable upside, equities research analysts plainly believe Midland States Bancorp is more favorable than State Street.

Earnings & Valuation

This table compares Midland States Bancorp and State Street”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Midland States Bancorp	$297.18 million	1.68	$75.46 million	$2.31	10.11
State Street	$12.55 billion	2.28	$1.94 billion	$6.33	15.44

State Street has higher revenue and earnings than Midland States Bancorp. Midland States Bancorp is trading at a lower price-to-earnings ratio than State Street, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Midland States Bancorp and State Street’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Midland States Bancorp	12.13%	8.90%	0.78%
State Street	9.87%	12.02%	0.82%

Summary

State Street beats Midland States Bancorp on 12 of the 16 factors compared between the two stocks.

About Midland States Bancorp

Midland States Bancorp, Inc. operates as a financial holding company for Midland States Bank that provides various banking products and services to individuals, businesses, municipalities, and other entities. It operates through Banking, Wealth Management, and Other segments. The company provides a range of financial products and services to consumers and businesses, including commercial loans to finance agricultural equipment and production; and commercial real estate loans for owner occupied offices, warehouses and production facilities, office buildings, hotels, mixed-use residential and commercial facilities, retail centers, multifamily properties, and assisted living facilities. In addition, it offers construction and land development loans, such as real estate investment properties and residential developments, and lesser extent loans; and residential real estate loans, which includes first and second mortgage loans, and home equity lines of credit consisting of loans secured by first or second mortgages on primarily owner occupied primary residences. The company also provides consumer installment loans for the purchase of cars, boats and other recreational vehicles, as well as for the purchase of major appliances and other home improvement projects; and commercial equipment leasing programs for manufacturing, construction, transportation, and healthcare industries. Further, it offers merchant services; deposit products, including checking, time, savings, money market, and certificates of deposit, as well as sweep accounts; letters of credit; and trust and wealth management services, such as financial and estate planning, trustee and custodial, investment management, tax, insurance, and business planning, corporate retirement plan consulting and administration, and retail brokerage services. The company was founded in 1881 and is headquartered in Effingham, Illinois.

About State Street

State Street Corporation, through its subsidiaries, provides a range of financial products and services to institutional investors worldwide. The company offers investment servicing products and services, including custody, accounting, regulatory reporting, investor, and performance and analytics; middle office products, such as IBOR, transaction management, loans, cash, derivatives and collateral, record keeping, and client reporting and investment analytics; finance leasing; foreign exchange, and brokerage and other trading services; securities finance and enhanced custody products; deposit and short-term investment facilities; investment manager and alternative investment manager operations outsourcing; performance, risk, and compliance analytics; and financial data management to support institutional investors. It also engages in the provision of portfolio management and risk analytics, as well as trading and post-trade settlement services with integrated compliance and managed data. In addition, the company offers investment management strategies and products, such as core and enhanced indexing, multi-asset strategies, active quantitative and fundamental active capabilities, and alternative investment strategies. Further, it provides services and solutions, including environmental, social, and governance investing; defined benefit and defined contribution; and global fiduciary solutions, as well as exchange-traded funds under the SPDR ETF brand. The company provides its products and services to mutual funds, collective investment funds, UCITS, hedge funds and other investment pools, corporate and public retirement plans, insurance companies, foundations, endowments, and investment managers. State Street Corporation was founded in 1792 and is headquartered in Boston, Massachusetts.