Contrasting Beacon Financial (NYSE:BBT) and Old Second Bancorp (NASDAQ:OSBC)

Old Second Bancorp (NASDAQ:OSBC) and Beacon Financial (NYSE:BBT) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, analyst recommendations, earnings, valuation, institutional ownership, dividends and profitability.

Dividends

Old Second Bancorp pays an annual dividend of $0.28 per share and has a dividend yield of 1.1%. Beacon Financial pays an annual dividend of $1.29 per share and has a dividend yield of 4.7%. Old Second Bancorp pays out 16.1% of its earnings in the form of a dividend. 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 has increased its dividend for 1 consecutive years.

Analyst Ratings

This is a summary of recent recommendations for Old Second Bancorp and Beacon Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Old Second Bancorp	0	2	4	1	2.86
Beacon Financial	0	5	2	0	2.29

Old Second Bancorp currently has a consensus target price of $26.20, suggesting a potential upside of 5.65%. Beacon Financial has a consensus target price of $32.50, suggesting a potential upside of 19.40%. Given Beacon Financial’s higher probable upside, analysts clearly believe Beacon Financial is more favorable than Old Second Bancorp.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Old Second Bancorp	20.22%	12.79%	1.65%
Beacon Financial	8.96%	9.15%	1.01%

Earnings and Valuation

This table compares Old Second Bancorp and Beacon Financial”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Old Second Bancorp	$374.97 million	3.36	$80.31 million	$1.74	14.25
Beacon Financial	$882.68 million	2.58	$90.27 million	$1.32	20.62

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.

Insider & Institutional Ownership

67.8% of Old Second Bancorp shares are held by institutional investors. Comparatively, 83.1% of Beacon Financial shares are held by institutional investors. 3.6% of Old Second Bancorp shares are held by insiders. Comparatively, 1.1% of Beacon Financial shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Volatility & Risk

Old Second Bancorp has a beta of 0.77, suggesting that its share price is 23% less volatile than the S&P 500. Comparatively, Beacon Financial has a beta of 0.6, suggesting that its share price is 40% less volatile than the S&P 500.

Summary

Old Second Bancorp beats Beacon Financial on 12 of the 18 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 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.