M&T Bank Corporation (NYSE: MTB) and Bank Of Montreal (NYSE:BMO) are both large-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, valuation, earnings, analyst recommendations, risk, institutional ownership and dividends.

Earnings & Valuation

This table compares M&T Bank Corporation and Bank Of Montreal’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
M&T Bank Corporation $5.24 billion 4.72 $1.30 billion $8.55 19.04
Bank Of Montreal $17.39 billion 2.91 $3.98 billion $6.14 12.69

Bank Of Montreal has higher revenue and earnings than M&T Bank Corporation. Bank Of Montreal is trading at a lower price-to-earnings ratio than M&T Bank Corporation, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

78.4% of M&T Bank Corporation shares are owned by institutional investors. Comparatively, 42.7% of Bank Of Montreal shares are owned by institutional investors. 3.2% of M&T Bank Corporation shares are owned by company insiders. Comparatively, 1.0% of Bank Of Montreal shares are owned by company 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.

Risk & Volatility

M&T Bank Corporation has a beta of 0.78, indicating that its share price is 22% less volatile than the S&P 500. Comparatively, Bank Of Montreal has a beta of 1.04, indicating that its share price is 4% more volatile than the S&P 500.

Profitability

This table compares M&T Bank Corporation and Bank Of Montreal’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
M&T Bank Corporation 24.10% 9.48% 1.16%
Bank Of Montreal 20.04% 14.36% 0.80%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for M&T Bank Corporation and Bank Of Montreal, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
M&T Bank Corporation 3 13 3 0 2.00
Bank Of Montreal 0 6 3 0 2.33

M&T Bank Corporation currently has a consensus target price of $160.35, indicating a potential downside of 1.52%. Bank Of Montreal has a consensus target price of $103.67, indicating a potential upside of 33.04%. Given Bank Of Montreal’s stronger consensus rating and higher probable upside, analysts clearly believe Bank Of Montreal is more favorable than M&T Bank Corporation.

Dividends

M&T Bank Corporation pays an annual dividend of $3.00 per share and has a dividend yield of 1.8%. Bank Of Montreal pays an annual dividend of $2.88 per share and has a dividend yield of 3.7%. M&T Bank Corporation pays out 35.1% of its earnings in the form of a dividend. Bank Of Montreal pays out 46.9% 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

M&T Bank Corporation beats Bank Of Montreal on 8 of the 15 factors compared between the two stocks.

About M&T Bank Corporation

M&T Bank Corporation (M&T) is a bank holding company. As of December 31, 2016, M&T had two bank subsidiaries: Manufacturers and Traders Trust Company (M&T Bank) and Wilmington Trust, National Association (Wilmington Trust, N.A.). The Company, along with its subsidiaries, offers a range of retail and commercial banking, trust and wealth management, and investment services. Its segments are Business Banking, which provides a range of services to small businesses and professionals; Commercial Banking, which provides a range of credit products and banking services; Commercial Real Estate, which provides credit and deposit services; Discretionary Portfolio, which includes investment and trading account securities, residential real estate loans and other assets, and short-term and long-term borrowed funds; Residential Mortgage Banking, which originates and services residential mortgage loans, and Retail Banking, which services to consumers through various delivery channels.

About Bank Of Montreal

Bank of Montreal (the Bank) is a financial services provider. The Bank provides a range of personal and commercial banking, wealth management and investment banking products and services. The Bank conducts its business through three operating groups: Personal and Commercial Banking (P&C), Wealth Management and BMO Capital Markets. The P&C business includes two retail and business banking operating segments, such as Canadian Personal and Commercial Banking (Canadian P&C), and the United States Personal and Commercial Banking (U.S. P&C). The Bank’s Wealth Management business serves a range of client segments, from mainstream to ultra-high net worth and institutional, with an offering of wealth management products and services, including insurance. BMO Capital Markets is a North American-based financial services provider offering a range of products and services to corporate, institutional and government clients. The Bank has over 1,500 bank branches in Canada and the United States.

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