Head to Head Review: Byline Bancorp (NYSE:BY) and ConnectOne Bancorp (NASDAQ:CNOB)

ConnectOne Bancorp (NASDAQ:CNOB) and Byline Bancorp (NYSE:BY) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, risk, institutional ownership, dividends, profitability, valuation and analyst recommendations.

Valuation and Earnings

This table compares ConnectOne Bancorp and Byline Bancorp”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ConnectOne Bancorp	$261.64 million	3.54	$87.00 million	$1.74	13.87
Byline Bancorp	$535.79 million	2.18	$107.88 million	$2.75	9.64

Byline Bancorp has higher revenue and earnings than ConnectOne Bancorp. Byline Bancorp is trading at a lower price-to-earnings ratio than ConnectOne Bancorp, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

ConnectOne Bancorp has a beta of 1.25, indicating that its stock price is 25% more volatile than the S&P 500. Comparatively, Byline Bancorp has a beta of 1.12, indicating that its stock price is 12% more volatile than the S&P 500.

Dividends

ConnectOne Bancorp pays an annual dividend of $0.72 per share and has a dividend yield of 3.0%. Byline Bancorp pays an annual dividend of $0.36 per share and has a dividend yield of 1.4%. ConnectOne Bancorp pays out 41.4% of its earnings in the form of a dividend. Byline Bancorp pays out 13.1% 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.

Institutional and Insider Ownership

67.7% of ConnectOne Bancorp shares are held by institutional investors. Comparatively, 67.7% of Byline Bancorp shares are held by institutional investors. 6.4% of ConnectOne Bancorp shares are held by insiders. Comparatively, 30.1% of Byline Bancorp shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for ConnectOne Bancorp and Byline Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ConnectOne Bancorp	0	1	1	1	3.00
Byline Bancorp	0	2	2	0	2.50

ConnectOne Bancorp currently has a consensus price target of $26.33, indicating a potential upside of 9.09%. Byline Bancorp has a consensus price target of $29.88, indicating a potential upside of 12.65%. Given Byline Bancorp’s higher probable upside, analysts clearly believe Byline Bancorp is more favorable than ConnectOne Bancorp.

Profitability

This table compares ConnectOne Bancorp and Byline Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ConnectOne Bancorp	13.56%	6.74%	0.76%
Byline Bancorp	19.39%	12.15%	1.32%

Summary

Byline Bancorp beats ConnectOne Bancorp on 11 of the 17 factors compared between the two stocks.

About ConnectOne Bancorp

ConnectOne Bancorp, Inc. operates as the bank holding company for ConnectOne Bank that provides commercial banking products and services for small and mid-sized businesses, local professionals, and individuals in the New York Metropolitan area and South Florida market. The company offers personal and business checking, money market, and time and savings accounts; credit cards, wire transfers, safe deposit boxes, automated teller services and telephone, and internet and mobile banking. It provides retirement accounts, consumers and cash management services for business clients, including treasury direct, automated clearing house, remote deposit capture, and digital invoicing. In addition, the company offers consumer and commercial business loans, including lines of credit, commercial and residential mortgages, home equity and bridge loans, and other personal loans; commercial loans secured by collateral, such as business assets comprising accounts receivable, inventory and equipment, and mortgages filed on commercial and residential real estate, as well as cash balances and marketable securities. Further, it provides real estate loans, which includes loans secured by first liens on completed commercial properties, including multi-family properties, to purchase or refinance properties; residential mortgages, such as loans secured by first liens on 1-4 family and condominium; and cooperative residential real estate loans. The company was formerly known as Center Bancorp, Inc. and changed its name to ConnectOne Bancorp, Inc. in July 2014. ConnectOne Bancorp, Inc. was incorporated in 1982 and is headquartered in Englewood Cliffs, New Jersey.

About Byline Bancorp

Byline Bancorp, Inc. operates as the bank holding company for Byline Bank that provides various banking products and services for small and medium sized businesses, commercial real estate and financial sponsors, and consumers in the United States. It offers various retail deposit products, including non-interest-bearing accounts, money market demand accounts, savings accounts, interest-bearing checking accounts, and time deposits; ATM and debit cards; and online, mobile, and text banking services, as well as commercial deposits. The company also provides term loans, revolving lines of credit, and construction financing services; senior secured financing solutions to private equity backed lower middle market companies; small business administration and united states department of agriculture loans; and treasury management products and services. In addition, it offers financing solutions for equipment vendors and their end users; syndication services; and investment, trust, and wealth management services that include fiduciary and executor services, financial planning solutions, investment advisory services, and private banking services for foundations and endowments, and high net worth individuals. The company was formerly known as Metropolitan Bank Group, Inc. and changed its name to Byline Bancorp, Inc. in 2015. Byline Bancorp, Inc. was founded in 1914 and is headquartered in Chicago, Illinois.