Financial Comparison: Amalgamated Financial (NASDAQ:AMAL) and Old Second Bancorp (NASDAQ:OSBC)

Old Second Bancorp (NASDAQ:OSBC) and Amalgamated Financial (NASDAQ:AMAL) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, dividends, risk, analyst recommendations, valuation and institutional ownership.

Insider & Institutional Ownership

67.8% of Old Second Bancorp shares are owned by institutional investors. Comparatively, 75.9% of Amalgamated Financial shares are owned by institutional investors. 3.8% of Old Second Bancorp shares are owned by insiders. Comparatively, 0.9% of Amalgamated Financial shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Old Second Bancorp	26.90%	16.36%	1.58%
Amalgamated Financial	23.22%	16.34%	1.17%

Dividends

Old Second Bancorp pays an annual dividend of $0.20 per share and has a dividend yield of 1.3%. Amalgamated Financial pays an annual dividend of $0.48 per share and has a dividend yield of 1.7%. Old Second Bancorp pays out 10.2% of its earnings in the form of a dividend. Amalgamated Financial pays out 15.7% 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.

Volatility & Risk

Old Second Bancorp has a beta of 1.09, indicating that its share price is 9% more volatile than the S&P 500. Comparatively, Amalgamated Financial has a beta of 0.94, indicating that its share price is 6% less volatile than the S&P 500.

Earnings & Valuation

This table compares Old Second Bancorp and Amalgamated Financial’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Old Second Bancorp	$279.77 million	2.49	$91.73 million	$1.97	7.88
Amalgamated Financial	$387.41 million	2.24	$87.98 million	$3.06	9.30

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

Analyst Recommendations

This is a breakdown of current ratings and price targets for Old Second Bancorp and Amalgamated Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Old Second Bancorp	0	0	2	1	3.33
Amalgamated Financial	0	0	3	0	3.00

Old Second Bancorp currently has a consensus price target of $17.67, suggesting a potential upside of 13.83%. Amalgamated Financial has a consensus price target of $30.50, suggesting a potential upside of 7.13%. Given Old Second Bancorp’s stronger consensus rating and higher probable upside, equities analysts plainly believe Old Second Bancorp is more favorable than Amalgamated Financial.

Summary

Old Second Bancorp beats Amalgamated Financial on 11 of the 17 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 Amalgamated Financial

Amalgamated Financial Corp. operates as the bank holding company for Amalgamated Bank that provides commercial and retail banking, investment management, and trust and custody services for commercial and retail customers in the United States. The company accepts various deposit products, including non-interest bearing accounts, interest-bearing demand products, savings accounts, money market accounts, NOW accounts, and certificates of deposit. It also provides various commercial loans comprising commercial and industrial, multifamily mortgage, and commercial real estate loans; residential mortgage loans; and retail loans, such as residential real estate, consumer solar, and consumer and other loans. In addition, the company offers online banking, bill payment, online cash management, and safe deposit box rental services; debit and ATM cards; and trust, custody, and investment management services comprising asset safekeeping, corporate actions, income collections, proxy, account transition, asset transfers, and conversion management services. Further, it provides investment products, such as funds spanning equity, fixed-income, real estate, and alternative investment products; and brokerage, asset management, and insurance products. Amalgamated Financial Corp. was founded in 1923 and is headquartered in New York, New York.