ConnectOne Bancorp (NASDAQ: CNOB) and M&T Bank (NYSE:MTB) are both financials companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, risk, dividends, institutional ownership, earnings, valuation and analyst recommendations.

Profitability

This table compares ConnectOne Bancorp and M&T Bank’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ConnectOne Bancorp 16.97% 9.64% 1.14%
M&T Bank 23.97% 9.52% 1.18%

Analyst Ratings

This is a breakdown of current ratings for ConnectOne Bancorp and M&T Bank, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ConnectOne Bancorp 0 0 2 0 3.00
M&T Bank 2 12 3 0 2.06

ConnectOne Bancorp currently has a consensus target price of $31.25, indicating a potential upside of 19.96%. M&T Bank has a consensus target price of $165.87, indicating a potential downside of 3.32%. Given ConnectOne Bancorp’s stronger consensus rating and higher probable upside, equities analysts plainly believe ConnectOne Bancorp is more favorable than M&T Bank.

Earnings & Valuation

This table compares ConnectOne Bancorp and M&T Bank’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
ConnectOne Bancorp $171.16 million 4.87 $31.08 million $0.94 27.71
M&T Bank $5.72 billion 4.51 $1.32 billion $8.68 19.77

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

Dividends

ConnectOne Bancorp pays an annual dividend of $0.30 per share and has a dividend yield of 1.2%. M&T Bank pays an annual dividend of $3.00 per share and has a dividend yield of 1.7%. ConnectOne Bancorp pays out 31.9% of its earnings in the form of a dividend. M&T Bank pays out 34.6% 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.

Volatility & Risk

ConnectOne Bancorp has a beta of 0.96, indicating that its stock price is 4% less volatile than the S&P 500. Comparatively, M&T Bank has a beta of 0.84, indicating that its stock price is 16% less volatile than the S&P 500.

Insider and Institutional Ownership

68.6% of ConnectOne Bancorp shares are held by institutional investors. Comparatively, 77.7% of M&T Bank shares are held by institutional investors. 7.6% of ConnectOne Bancorp shares are held by company insiders. Comparatively, 3.2% of M&T Bank shares are held 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.

About ConnectOne Bancorp

ConnectOne Bancorp, Inc. is a bank holding company of ConnectOne Bank (the Bank). The Bank is a community-based, full-service New Jersey-chartered commercial bank. The Bank offers a range of deposit and loan products. In addition, to attract the business of consumer and business customers, it also provides an array of other banking services. Products and services provided include personal and business checking accounts, retirement accounts, money market accounts, time and savings accounts, credit cards, wire transfers, access to automated teller services, Internet banking, Treasury Direct, automated clearing house (ACH) origination, lockbox services and mobile banking by phone. In addition, it offers safe deposit boxes. The Bank also offers remote deposit capture banking for both retail and business customers. It offers a range of deposit and loan products and services to the general public and, in particular, to small and mid-sized businesses, local professionals and individuals.

About M&T Bank

M&T Bank Corporation (M&T) is a bank holding company. As of December 31, 2016, M&T had two bank subsidiaries: Manufacturers and Traders Trust Company (M&T Bank) and Wilmington Trust, National Association (Wilmington Trust, N.A.). The Company, along with its subsidiaries, offers a range of retail and commercial banking, trust and wealth management, and investment services. Its segments are Business Banking, which provides a range of services to small businesses and professionals; Commercial Banking, which provides a range of credit products and banking services; Commercial Real Estate, which provides credit and deposit services; Discretionary Portfolio, which includes investment and trading account securities, residential real estate loans and other assets, and short-term and long-term borrowed funds; Residential Mortgage Banking, which originates and services residential mortgage loans, and Retail Banking, which services to consumers through various delivery channels.

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