Beacon Financial (NYSE:BBT – Get Free Report) and Old Second Bancorp (NASDAQ:OSBC – Get Free Report) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their valuation, dividends, risk, institutional ownership, analyst recommendations, earnings and profitability.
Volatility & Risk
Beacon Financial has a beta of 0.6, meaning that its share price is 40% less volatile than the S&P 500. Comparatively, Old Second Bancorp has a beta of 0.77, meaning that its share price is 23% less volatile than the S&P 500.
Dividends
Beacon Financial pays an annual dividend of $1.29 per share and has a dividend yield of 4.7%. Old Second Bancorp pays an annual dividend of $0.28 per share and has a dividend yield of 1.1%. Beacon Financial pays out 97.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Old Second Bancorp pays out 16.1% of its earnings in the form of a dividend. Old Second Bancorp has raised its dividend for 1 consecutive years.
Earnings and Valuation
This table compares Beacon Financial and Old Second Bancorp”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Beacon Financial | $882.68 million | 2.61 | $90.27 million | $1.32 | 20.84 |
| Old Second Bancorp | $401.54 million | 3.15 | $80.31 million | $1.74 | 14.30 |
Beacon Financial has higher revenue and earnings than Old Second Bancorp. Old Second Bancorp is trading at a lower price-to-earnings ratio than Beacon Financial, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Beacon Financial and Old Second Bancorp’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Beacon Financial | 8.96% | 9.15% | 1.01% |
| Old Second Bancorp | 20.22% | 12.79% | 1.65% |
Analyst Recommendations
This is a summary of recent recommendations and price targets for Beacon Financial and Old Second Bancorp, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Beacon Financial | 0 | 4 | 3 | 0 | 2.43 |
| Old Second Bancorp | 0 | 2 | 4 | 1 | 2.86 |
Beacon Financial presently has a consensus price target of $32.50, indicating a potential upside of 18.14%. Old Second Bancorp has a consensus price target of $26.20, indicating a potential upside of 5.31%. Given Beacon Financial’s higher probable upside, equities research analysts clearly believe Beacon Financial is more favorable than Old Second Bancorp.
Institutional and Insider Ownership
83.1% of Beacon Financial shares are held by institutional investors. Comparatively, 67.8% of Old Second Bancorp shares are held by institutional investors. 1.1% of Beacon Financial shares are held by insiders. Comparatively, 3.6% of Old Second Bancorp shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Summary
Old Second Bancorp beats Beacon Financial on 12 of the 18 factors compared between the two stocks.
About Beacon Financial
Truist Financial Corp. operates as a financial holding company, which engages in the provision of banking services to individuals, businesses and municipalities. The firm offers a variety of loans and lease financing to individuals and entities, including insurance premium financing, permanent commercial real estate financing arrangements, loan servicing for third-party investors, direct consumer finance loans to individuals, credit card lending, automobile financing and equipment financing. It also markets a range of other services, including deposits, life insurance, property and casualty insurance, health Truist Financial Corp. operates as a financial holding company. It engages in the provision of banking services to individuals, businesses and municipalities. The company operates through the following segments: Consumer Banking and Wealth; Corporate and Commercial Banking; and Insurance Holdings. The firm offers a variety of loans and lease financing to individuals and entities, including insurance premium financing, permanent commercial real estate financing arrangements, loan servicing for third-party investors, direct consumer finance loans to individuals, credit card lending, automobile financing and equipment financing. It also markets a range of other services, including deposits, life insurance, property and casualty insurance, health insurance and commercial general liability insurance on an agency basis and through a wholesale insurance brokerage operation, merchant services, trust and retirement services, comprehensive wealth advisory services, asset management and capital markets services. The company was founded on December 6, 2019 and is headquartered in Charlotte, NC. insurance and commercial general liability insurance on an agency basis and through a wholesale insurance brokerage operation, merchant services, trust and retirement services, comprehensive wealth advisory services, asset management and capital markets services. The company was founded on December 6, 2019 and is headquartered in Charlotte, NC.
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.
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