Old Second Bancorp (NASDAQ:OSBC – Get Free Report) and Banner (NASDAQ:BANR – Get Free Report) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, risk, dividends, analyst recommendations, institutional ownership, profitability and earnings.
Institutional & Insider Ownership
67.8% of Old Second Bancorp shares are held by institutional investors. Comparatively, 87.3% of Banner shares are held by institutional investors. 3.8% of Old Second Bancorp shares are held by company insiders. Comparatively, 1.6% of Banner shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Analyst Recommendations
This is a summary of recent recommendations and price targets for Old Second Bancorp and Banner, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Old Second Bancorp | 0 | 1 | 2 | 1 | 3.00 |
| Banner | 0 | 3 | 3 | 0 | 2.50 |
Valuation & Earnings
This table compares Old Second Bancorp and Banner”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Old Second Bancorp | $326.15 million | 2.56 | $91.73 million | $1.85 | 10.08 |
| Banner | $745.98 million | 3.26 | $183.62 million | $4.78 | 14.78 |
Banner has higher revenue and earnings than Old Second Bancorp. Old Second Bancorp is trading at a lower price-to-earnings ratio than Banner, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Old Second Bancorp has a beta of 1.08, suggesting that its stock price is 8% more volatile than the S&P 500. Comparatively, Banner has a beta of 1.09, suggesting that its stock price is 9% more volatile than the S&P 500.
Profitability
This table compares Old Second Bancorp and Banner’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Old Second Bancorp | 25.02% | 13.81% | 1.49% |
| Banner | 20.28% | 10.22% | 1.10% |
Dividends
Old Second Bancorp pays an annual dividend of $0.24 per share and has a dividend yield of 1.3%. Banner pays an annual dividend of $1.92 per share and has a dividend yield of 2.7%. Old Second Bancorp pays out 13.0% of its earnings in the form of a dividend. Banner pays out 40.2% 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.
Summary
Banner beats Old Second Bancorp on 9 of the 17 factors compared between the two stocks.
About Old Second Bancorp
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 Banner
Banner Corporation operates as the bank holding company for Banner Bank that engages in the provision of commercial banking and financial products and services to individuals, businesses, and public sector entities in the United States. It accepts various deposit instruments, including interest-bearing and non-interest-bearing checking accounts, money market deposit accounts, regular savings accounts, and certificates of deposit, as well as treasury management services and retirement savings plans. The company also provides commercial real estate loans, including owner-occupied, investment properties, and multifamily residential real estate loans; construction, land, and land development loans; one- to four-family residential real estate lending; commercial business loans; agricultural loans; consumer and other loans, such as home equity lines of credit, automobile, and boat and recreational vehicle loans, as well as loans secured by deposit accounts; and small business administration loans. In addition, it provides electronic and digital banking services comprising debit cards and ATMs, internet banking, remote deposit, and mobile banking services. The company was founded in 1890 and is based in Walla Walla, Washington.
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