M&T Bank (NYSE:MTB – Get Free Report) and Live Oak Bancshares (NASDAQ:LOB – Get Free Report) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, profitability, institutional ownership, valuation, dividends, analyst recommendations and risk.
Institutional and Insider Ownership
84.7% of M&T Bank shares are owned by institutional investors. Comparatively, 64.0% of Live Oak Bancshares shares are owned by institutional investors. 0.8% of M&T Bank shares are owned by company insiders. Comparatively, 23.9% of Live Oak Bancshares shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Earnings & Valuation
This table compares M&T Bank and Live Oak Bancshares”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| M&T Bank | $9.17 billion | 3.53 | $2.74 billion | $14.79 | 13.11 |
| Live Oak Bancshares | $467.62 million | 4.48 | $73.90 million | $1.99 | 23.42 |
Profitability
This table compares M&T Bank and Live Oak Bancshares’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| M&T Bank | 17.84% | 9.62% | 1.14% |
| Live Oak Bancshares | 11.22% | 10.93% | 0.87% |
Volatility and Risk
M&T Bank has a beta of 0.75, suggesting that its stock price is 25% less volatile than the S&P 500. Comparatively, Live Oak Bancshares has a beta of 1.6, suggesting that its stock price is 60% more volatile than the S&P 500.
Analyst Recommendations
This is a breakdown of recent ratings for M&T Bank and Live Oak Bancshares, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| M&T Bank | 1 | 6 | 9 | 0 | 2.50 |
| Live Oak Bancshares | 0 | 2 | 2 | 0 | 2.50 |
M&T Bank currently has a consensus target price of $197.47, indicating a potential upside of 1.87%. Live Oak Bancshares has a consensus target price of $48.75, indicating a potential upside of 4.61%. Given Live Oak Bancshares’ higher probable upside, analysts plainly believe Live Oak Bancshares is more favorable than M&T Bank.
Dividends
M&T Bank pays an annual dividend of $5.40 per share and has a dividend yield of 2.8%. Live Oak Bancshares pays an annual dividend of $0.12 per share and has a dividend yield of 0.3%. M&T Bank pays out 36.5% of its earnings in the form of a dividend. Live Oak Bancshares pays out 6.0% 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.
Summary
M&T Bank beats Live Oak Bancshares on 8 of the 15 factors compared between the two stocks.
About M&T Bank
M&T Bank Corporation operates as a bank holding company for Manufacturers and Traders Trust Company and Wilmington Trust, National Association that engages in the provision of retail and commercial banking products and services in the United States. The company operates through three segments: Commercial Bank, Retail Bank, and Institutional Services and Wealth Management. It offers a range of credit products and banking services, such as commercial lending and leasing, letters of credits, commercial real estate loans, and credit facilities secured by various commercial real estate to middle-market and large commercial customers. The company also provides customers deposit products, including demand, savings and time accounts, and other services; automobile and recreational finance loans, home equity loans and lines of credit, credit cards, and other loan products, as well as residential mortgage and real estate loans; business loans, cash management, payroll, and direct deposit services to consumers and small businesses through branch network, telephone banking, internet banking, and automated teller machines. In addition, it offers trustee, agency, investment management, security brokerage, and administrative services; personal trust, planning, fiduciary, asset management, family office, and other services; and investment products, including mutual funds and annuities, and other services for corporations and institutions, investment bankers, corporate tax, finance and legal executives, and other institutional clients. The company was founded in 1856 and is headquartered in Buffalo, New York.
About Live Oak Bancshares
Live Oak Bancshares, Inc. operates as the bank holding company for Live Oak Banking Company that provides various banking products and services in the United States. It operates through two segments, Banking and Fintech. The company accepts various deposit products, including noninterest-bearing demand, as well as interest-bearing checking, money market, savings, and time deposits. It also offers commercial and industrial loans; construction and development loans; owner occupied and non-owner occupied collateral commercial real estate loans; and commercial land loans. In addition, the company provides settlement, accounting, and securitization services for government guaranteed loans; financing for renewable energy application industry; wealth and investment management services to high-net-worth individuals and families; and investment advisory services to a series of funds focused on providing venture capital to new and emerging financial technology companies. Live Oak Bancshares, Inc. was incorporated in 2008 and is headquartered in Wilmington, North Carolina.
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