Analyzing UMB Financial (NASDAQ:UMBF) & Old National Bancorp (NASDAQ:ONB)

UMB Financial (NASDAQ:UMBF) and Old National Bancorp (NASDAQ:ONB) are both mid-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, profitability, dividends, analyst recommendations, risk, earnings and institutional ownership.

Volatility & Risk

UMB Financial has a beta of 0.77, indicating that its stock price is 23% less volatile than the S&P 500. Comparatively, Old National Bancorp has a beta of 0.89, indicating that its stock price is 11% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
UMB Financial	15.42%	12.27%	1.05%
Old National Bancorp	17.67%	9.92%	1.13%

Analyst Ratings

This is a breakdown of current ratings for UMB Financial and Old National Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
UMB Financial	0	3	5	1	2.78
Old National Bancorp	0	2	6	1	2.89

UMB Financial presently has a consensus price target of $133.89, indicating a potential upside of 9.39%. Old National Bancorp has a consensus price target of $26.40, indicating a potential upside of 18.39%. Given Old National Bancorp’s stronger consensus rating and higher probable upside, analysts plainly believe Old National Bancorp is more favorable than UMB Financial.

Institutional & Insider Ownership

87.8% of UMB Financial shares are owned by institutional investors. Comparatively, 83.7% of Old National Bancorp shares are owned by institutional investors. 5.5% of UMB Financial shares are owned by insiders. Comparatively, 0.9% of Old National Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Dividends

UMB Financial pays an annual dividend of $1.60 per share and has a dividend yield of 1.3%. Old National Bancorp pays an annual dividend of $0.56 per share and has a dividend yield of 2.5%. UMB Financial pays out 18.4% of its earnings in the form of a dividend. Old National Bancorp pays out 33.1% 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. UMB Financial has increased its dividend for 32 consecutive years.

Valuation and Earnings

This table compares UMB Financial and Old National Bancorp”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
UMB Financial	$2.80 billion	3.32	$441.24 million	$8.70	14.07
Old National Bancorp	$2.10 billion	4.15	$539.19 million	$1.69	13.20

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

Summary

Old National Bancorp beats UMB Financial on 9 of the 17 factors compared between the two stocks.

About UMB Financial

UMB Financial Corporation operates as the bank holding company that provides banking services and asset servicing in the United States and internationally. The Commercial Banking segment provides commercial loans and credit card; commercial real estate financing; letters of credit; loan syndication, and consultative service; various business solutions including asset-based lending, mezzanine debt, and minority equity investment; and treasury management service, such as depository service, account reconciliation, cash management tool, accounts payable and receivable solution, electronic fund transfer and automated payment, controlled disbursement, lockbox service, and remote deposit capture service. The Institutional Banking segment offers fund, asset management, and healthcare service to institutional clients; and fund administration and accounting, investor service and transfer agency, mutual fund service, alternative investment service, fixed income sale, trading and underwriting, and corporate trust and escrow service, as well as institutional custody service. This segment also provides healthcare payment solution includes custodial service for health saving accounts and private label, multipurpose debit cards to insurance carriers, third-party administrator, software companies, employers, and financial institutions. The Personal Banking segment offers deposit account, retail credit card, private banking, installment loan, home equity line of credit, residential mortgage, as well as internet banking, ATM network, private banking, brokerage and insurance service, and investment advisory, custody, and trust services. It operates through a network of branches and offices. The company was founded in 1913 and is headquartered in Kansas City, Missouri.

About Old National Bancorp

Old National Bancorp operates as the bank holding company for Old National Bank that provides various financial services to individual and commercial customers in the United States. It accepts deposit accounts, including noninterest-bearing demand, interest-bearing checking, negotiable order of withdrawal, savings and money market, and time deposits; and offers loans, such as home equity lines of credit, residential real estate loans, consumer loans, commercial loans, commercial real estate loans, agricultural loans, letters of credit, and lease financing. The company also provides debit and automated teller machine cards, telephone access, online banking, and other electronic and mobile banking services; cash management, private banking, brokerage, trust, investment advisory, and other traditional banking services; wealth management, investment, and foreign currency services; and treasury management, merchant, and capital markets services, as well as community development lending and equity investment solutions. The company was founded in 1834 and is headquartered in Evansville, Indiana.