Old Second Bancorp (NASDAQ:OSBC) vs. German American Bancorp (NASDAQ:GABC) Head to Head Analysis

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

Earnings & Valuation

This table compares Old Second Bancorp and German American Bancorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Old Second Bancorp	$353.63 million	2.97	$80.31 million	$1.68	12.16
German American Bancorp	$487.40 million	3.21	$112.64 million	$3.61	11.53

German American Bancorp has higher revenue and earnings than Old Second Bancorp. German American Bancorp 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.

Dividends

Old Second Bancorp pays an annual dividend of $0.28 per share and has a dividend yield of 1.4%. German American Bancorp pays an annual dividend of $1.24 per share and has a dividend yield of 3.0%. Old Second Bancorp pays out 16.7% of its earnings in the form of a dividend. German American Bancorp pays out 34.3% 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 and German American Bancorp has raised its dividend for 13 consecutive years. German American Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

67.8% of Old Second Bancorp shares are held by institutional investors. Comparatively, 46.9% of German American Bancorp shares are held by institutional investors. 3.6% of Old Second Bancorp shares are held by insiders. Comparatively, 3.2% of German American Bancorp shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Risk and Volatility

Old Second Bancorp has a beta of 0.71, indicating that its stock price is 29% less volatile than the S&P 500. Comparatively, German American Bancorp has a beta of 0.6, indicating that its stock price is 40% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for Old Second Bancorp and German American Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Old Second Bancorp	0	1	4	0	2.80
German American Bancorp	0	1	3	0	2.75

Old Second Bancorp presently has a consensus price target of $23.50, indicating a potential upside of 15.03%. German American Bancorp has a consensus price target of $47.67, indicating a potential upside of 14.47%. Given Old Second Bancorp’s stronger consensus rating and higher possible upside, analysts plainly believe Old Second Bancorp is more favorable than German American Bancorp.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Old Second Bancorp	20.07%	12.67%	1.62%
German American Bancorp	27.09%	11.98%	1.62%

Summary

Old Second Bancorp beats German American Bancorp on 9 of the 16 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 German American Bancorp

German American Bancorp, Inc. operates as a financial holding company for German American Bank that provides retail and commercial banking services. The company operates through three segments: Core Banking, Wealth Management Services, and Insurance Operations. The Core Banking segment accepts deposits from the general public; and originates consumer, commercial and agricultural, commercial and agricultural real estate, and residential mortgage loans, as well as sells residential mortgage loans in the secondary market. The Wealth Management segment provides trust, investment advisory, brokerage, and retirement planning services. The Insurance Operations segment offers a range of personal and corporate property and casualty insurance products. It also offers checking, saving, and individual retirement accounts; certificates of deposit; wire transfer; credit cards; home equity, mortgages, and small business; treasury management; and online and mobile banking, bill pay, digital wallet, mobile check deposit, credit score and report, money management, and estatements, as well as wealth advisory. German American Bancorp, Inc. was founded in 1910 and is based in Jasper, Indiana.