Eagle Bancorp Montana (NASDAQ:EBMT – Get Free Report) and Old Second Bancorp (NASDAQ:OSBC – Get Free Report) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, analyst recommendations, valuation, profitability, earnings and risk.
Dividends
Eagle Bancorp Montana pays an annual dividend of $0.58 per share and has a dividend yield of 3.3%. Old Second Bancorp pays an annual dividend of $0.28 per share and has a dividend yield of 1.4%. Eagle Bancorp Montana pays out 33.7% of its earnings in the form of a dividend. Old Second Bancorp pays out 18.5% 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. Eagle Bancorp Montana has increased its dividend for 14 consecutive years and Old Second Bancorp has increased its dividend for 1 consecutive years. Eagle Bancorp Montana is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation and Earnings
This table compares Eagle Bancorp Montana and Old Second Bancorp”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Eagle Bancorp Montana | $121.99 million | 1.16 | $9.78 million | $1.72 | 10.34 |
| Old Second Bancorp | $341.72 million | 3.02 | $85.26 million | $1.51 | 12.99 |
Old Second Bancorp has higher revenue and earnings than Eagle Bancorp Montana. Eagle Bancorp Montana 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.
Insider and Institutional Ownership
35.7% of Eagle Bancorp Montana shares are held by institutional investors. Comparatively, 67.8% of Old Second Bancorp shares are held by institutional investors. 6.1% of Eagle Bancorp Montana shares are held by insiders. Comparatively, 3.8% of Old Second Bancorp shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Profitability
This table compares Eagle Bancorp Montana and Old Second Bancorp’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Eagle Bancorp Montana | 10.76% | 7.53% | 0.64% |
| Old Second Bancorp | 18.89% | 12.34% | 1.51% |
Risk & Volatility
Eagle Bancorp Montana has a beta of 0.33, indicating that its share price is 67% less volatile than the S&P 500. Comparatively, Old Second Bancorp has a beta of 0.82, indicating that its share price is 18% less volatile than the S&P 500.
Analyst Ratings
This is a summary of current ratings and price targets for Eagle Bancorp Montana and Old Second Bancorp, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Eagle Bancorp Montana | 0 | 0 | 1 | 0 | 3.00 |
| Old Second Bancorp | 0 | 1 | 4 | 1 | 3.00 |
Old Second Bancorp has a consensus target price of $21.63, suggesting a potential upside of 10.22%. Given Old Second Bancorp’s higher probable upside, analysts clearly believe Old Second Bancorp is more favorable than Eagle Bancorp Montana.
Summary
Old Second Bancorp beats Eagle Bancorp Montana on 13 of the 17 factors compared between the two stocks.
About Eagle Bancorp Montana
Eagle Bancorp Montana, Inc. operates as the bank holding company for Opportunity Bank of Montana that provides various retail banking products and services to small businesses and individuals in Montana. It accepts various deposit products, such as checking, savings, money market, and individual retirement accounts, as well as certificates of deposit accounts. The company also provides 1-4 family residential mortgage loans, such as residential mortgages and construction of residential properties; commercial real estate loans, including multi-family dwellings, nonresidential property, commercial construction and development, and farmland loans; and second mortgage/home equity loans. In addition, it offers consumer loans, such as loans secured by collateral other than real estate, such as automobiles, recreational vehicles, and boats; personal loans and lines of credit; commercial business loans consisting of business loans and lines of credit on a secured and unsecured basis; construction loans; agricultural loans; and mortgage loan services. The company operates full-service branches and automated teller machines. Eagle Bancorp Montana, Inc. was founded in 1922 and is headquartered in Helena, Montana.
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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