Bank OZK (NASDAQ:OZK) and Old Second Bancorp (NASDAQ:OSBC) Head-To-Head Contrast

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

Insider and Institutional Ownership

67.8% of Old Second Bancorp shares are owned by institutional investors. Comparatively, 86.2% of Bank OZK shares are owned by institutional investors. 3.6% of Old Second Bancorp shares are owned by company insiders. Comparatively, 6.7% of Bank OZK shares are owned by company 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 Bank OZK’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%
Bank OZK	24.95%	11.87%	1.67%

Volatility and Risk

Old Second Bancorp has a beta of 0.7, suggesting that its share price is 30% less volatile than the S&P 500. Comparatively, Bank OZK has a beta of 0.88, suggesting that its share price is 12% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations for Old Second Bancorp and Bank OZK, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Old Second Bancorp	0	2	5	0	2.71
Bank OZK	3	5	3	0	2.00

Old Second Bancorp presently has a consensus target price of $25.40, indicating a potential upside of 0.55%. Bank OZK has a consensus target price of $56.88, indicating a potential upside of 16.81%. Given Bank OZK’s higher probable upside, analysts plainly believe Bank OZK is more favorable than Old Second Bancorp.

Dividends

Old Second Bancorp pays an annual dividend of $0.28 per share and has a dividend yield of 1.1%. Bank OZK pays an annual dividend of $1.92 per share and has a dividend yield of 3.9%. Old Second Bancorp pays out 16.1% of its earnings in the form of a dividend. Bank OZK pays out 31.7% 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. Old Second Bancorp has increased its dividend for 1 consecutive years and Bank OZK has increased its dividend for 29 consecutive years. Bank OZK is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Old Second Bancorp and Bank OZK”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Old Second Bancorp	$401.54 million	3.20	$80.31 million	$1.74	14.52
Bank OZK	$2.81 billion	1.94	$715.48 million	$6.05	8.05

Bank OZK has higher revenue and earnings than Old Second Bancorp. Bank OZK 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.

Summary

Bank OZK beats Old Second Bancorp 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 Bank OZK

Bank OZK provides various retail and commercial banking services for individuals and businesses in the United States. The company offers deposit services, including non-interest bearing checking, interest bearing transaction, business sweep, savings, money market, individual retirement, and other accounts, as well as time and reciprocal deposits. It also provides trust and wealth services, such as personal trusts, custodial accounts, investment management accounts, and retirement accounts, as well as corporate trust services, including trustee, paying agent and registered transfer agent services, and other related services. In addition, the company offers treasury management services comprising automated clearing house, wire transfer, transaction reporting, wholesale lockbox, remote deposit capture, automated credit line transfer, reconciliation, positive pay, commercial card, and other services, as well as zero balance and investment sweep accounts. Further, it provides real estate, consumer, small business, indirect recreational vehicle and marine, equipment, agricultural, commercial and industrial, government guaranteed, lines of credit, homebuilder, and affordable housing loans; lender and structured, business aviation, and subscription financing services; and mortgage and other lending products. Additionally, the company offers ATMs; telephone, online, and mobile banking services; credit and debit cards; safe deposit boxes; and other products and services. The company was formerly known as Bank of the Ozarks and changed its name to Bank OZK in July 2018. Bank OZK was founded in 1903 and is headquartered in Little Rock, Arkansas.