Critical Review: Huntington Bancshares (NASDAQ:HBAN) vs. Old Second Bancorp (NASDAQ:OSBC)

Huntington Bancshares (NASDAQ:HBAN) and Old Second Bancorp (NASDAQ:OSBC) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, valuation, institutional ownership, risk, dividends, earnings and analyst recommendations.

Analyst Ratings

This is a summary of current ratings and recommmendations for Huntington Bancshares and Old Second Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Huntington Bancshares	1	4	14	1	2.75
Old Second Bancorp	0	1	4	0	2.80

Huntington Bancshares presently has a consensus price target of $20.13, indicating a potential upside of 23.09%. Old Second Bancorp has a consensus price target of $23.38, indicating a potential upside of 10.31%. Given Huntington Bancshares’ higher possible upside, analysts clearly believe Huntington Bancshares is more favorable than Old Second Bancorp.

Dividends

Huntington Bancshares pays an annual dividend of $0.62 per share and has a dividend yield of 3.8%. Old Second Bancorp pays an annual dividend of $0.28 per share and has a dividend yield of 1.3%. Huntington Bancshares pays out 44.6% of its earnings in the form of a dividend. Old Second Bancorp pays out 17.2% 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. Old Second Bancorp has raised its dividend for 1 consecutive years.

Insider & Institutional Ownership

80.7% of Huntington Bancshares shares are held by institutional investors. Comparatively, 67.8% of Old Second Bancorp shares are held by institutional investors. 0.7% of Huntington Bancshares shares are held by company insiders. Comparatively, 3.8% of Old Second Bancorp shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Volatility and Risk

Huntington Bancshares has a beta of 0.95, indicating that its share price is 5% less volatile than the S&P 500. Comparatively, Old Second Bancorp has a beta of 0.74, indicating that its share price is 26% less volatile than the S&P 500.

Valuation and Earnings

This table compares Huntington Bancshares and Old Second Bancorp”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Huntington Bancshares	$12.49 billion	2.67	$2.21 billion	$1.39	11.76
Old Second Bancorp	$401.54 million	2.78	$80.31 million	$1.63	13.00

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

Profitability

This table compares Huntington Bancshares and Old Second Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Huntington Bancshares	17.71%	11.98%	1.11%
Old Second Bancorp	20.00%	12.79%	1.60%

Summary

Old Second Bancorp beats Huntington Bancshares on 10 of the 18 factors compared between the two stocks.

About Huntington Bancshares

Huntington Bancshares Incorporated operates as the bank holding company for The Huntington National Bank that provides commercial, consumer, and mortgage banking services in the United States. The company offers financial products and services to consumer and business customers, including deposits, lending, payments, mortgage banking, dealer financing, investment management, trust, brokerage, insurance, and other financial products and services. It also provides 24-hour grace, asterisk-free checking, money scout, $50 safety zone, standby cash, early pay, instant access, savings goal getter, and Huntington heads up; digitally powered consumer and business financial solutions to consumer lending, regional banking, branch banking, and wealth management customers; direct and indirect consumer loans, as well as dealer finance loans and deposits; and private banking, wealth management and legacy planning through investment and portfolio management, fiduciary administration and trust, institutional custody, and full-service retail brokerage investment services. The company offers equipment financing, asset-based lending, distribution finance, structured lending, and municipal financing solutions, as well as Huntington ChoicePay. In addition, it offers lending, liquidity, treasury management and other payment services, and capital markets; government and non-profits, healthcare, technology and telecommunications, franchises, financial sponsors, and global services; and corporate risk management, institutional sales and trading, debt and equity issuance, and additional advisory services. The company offers its products through a network of channels, including branches and ATMs, online and mobile banking, and through customer call centers to customers in middle market banking, corporate, specialty, and government banking, asset finance, commercial real estate banking, and capital markets. The company was founded in 1866 and is headquartered in Columbus, Ohio.

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.