Old National Bancorp (NASDAQ:ONB) and Valley National Bancorp (NYSE:VLY) are both mid-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, profitability, valuation, risk, earnings, institutional ownership and dividends.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Old National Bancorp and Valley National Bancorp, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Old National Bancorp 0 7 2 0 2.22
Valley National Bancorp 0 2 5 0 2.71

Old National Bancorp presently has a consensus price target of $20.13, indicating a potential upside of 4.22%. Valley National Bancorp has a consensus price target of $13.96, indicating a potential upside of 30.39%. Given Valley National Bancorp’s stronger consensus rating and higher probable upside, analysts plainly believe Valley National Bancorp is more favorable than Old National Bancorp.

Risk & Volatility

Old National Bancorp has a beta of 0.85, meaning that its share price is 15% less volatile than the S&P 500. Comparatively, Valley National Bancorp has a beta of 0.88, meaning that its share price is 12% less volatile than the S&P 500.

Profitability

This table compares Old National Bancorp and Valley National Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Old National Bancorp 15.19% 8.08% 1.01%
Valley National Bancorp 16.35% 8.56% 0.86%

Earnings & Valuation

This table compares Old National Bancorp and Valley National Bancorp’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Old National Bancorp $678.72 million 4.33 $95.72 million $1.10 17.55
Valley National Bancorp $945.86 million 3.75 $161.90 million $0.69 15.52

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

Dividends

Old National Bancorp pays an annual dividend of $0.52 per share and has a dividend yield of 2.7%. Valley National Bancorp pays an annual dividend of $0.44 per share and has a dividend yield of 4.1%. Old National Bancorp pays out 47.3% of its earnings in the form of a dividend. Valley National Bancorp pays out 63.8% 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.

Insider & Institutional Ownership

73.5% of Old National Bancorp shares are owned by institutional investors. Comparatively, 55.9% of Valley National Bancorp shares are owned by institutional investors. 1.6% of Old National Bancorp shares are owned by insiders. Comparatively, 3.5% of Valley National Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Valley National Bancorp beats Old National Bancorp on 10 of the 16 factors compared between the two stocks.

About Old National Bancorp

Old National Bancorp operates as the holding company for Old National Bank that provides various financial services to individual and commercial customers in the United States. The company offers deposit accounts, including noninterest-bearing demand, NOW, savings and money market, and time deposits; and loans, such as home equity lines of credit, residential real estate loans, consumer loans, commercial loans, commercial real estate loans, letters of credit, and lease financing. It also provides debit and ATM cards, telephone access, and online banking, as well as other electronic and mobile banking services; and cash management, private banking, brokerage, trust, and investment advisory services. As of December 31, 2016, the company operated 191 banking centers located primarily in Indiana, Kentucky, Michigan, Wisconsin, and Minnesota. Old National Bancorp was founded in 1834 and is headquartered in Evansville, Indiana.

About Valley National Bancorp

Valley National Bancorp operates as the holding company for the Valley National Bank that provides commercial, retail, trust, and investment services. The company operates through Commercial Lending, Consumer Lending, and Investment Management segments. Its deposit products include non-interest bearing, savings, NOW, and money market deposits, as well as certificates of deposit. The company's loan products comprise construction, residential mortgage, home equity, automobile, and floating rate and adjustable rate commercial and industrial loans, as well as fixed rate owner occupied and commercial real estate loans, credit card loans, personal lines of credit, personal loans, and loans secured by cash surrender value of life insurance. It also invests in securities and interest-bearing deposits with banks, such as fixed rate securities and federal funds; and offers international banking services, such as standby letters of credit, documentary letters of credit and related products, and other ancillary services. In addition, the company provides asset management advisory, trust, and asset-based lending support services; property and casualty, life, health, and title insurance products; and health care equipment lending and other commercial equipment leases, as well as real estate related investments. Further, it offers other banking services comprising automated teller machine, telephone and Internet banking, remote deposit capturing, overdraft, drive-in and night deposit, and safe deposit services. As of December 31, 2017, the company operated 237 branches in northern and central New Jersey; the New York City boroughs of Manhattan, Brooklyn, Queens, and Long Island; and southeast and central Florida. Valley National Bancorp was founded in 1927 and is headquartered in Wayne, New Jersey.

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