Critical Comparison: Fidelity D&D Bancorp (NASDAQ:FDBC) vs. Byline Bancorp (NYSE:BY)

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

Insider & Institutional Ownership

20.1% of Fidelity D&D Bancorp shares are held by institutional investors. Comparatively, 67.7% of Byline Bancorp shares are held by institutional investors. 21.0% of Fidelity D&D Bancorp shares are held by company insiders. Comparatively, 28.8% of Byline Bancorp shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Fidelity D&D Bancorp and Byline Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fidelity D&D Bancorp	0	1	0	0	2.00
Byline Bancorp	0	1	2	1	3.00

Byline Bancorp has a consensus target price of $33.67, suggesting a potential upside of 2.31%. Given Byline Bancorp’s stronger consensus rating and higher probable upside, analysts clearly believe Byline Bancorp is more favorable than Fidelity D&D Bancorp.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Fidelity D&D Bancorp	20.08%	12.84%	1.04%
Byline Bancorp	20.54%	11.38%	1.39%

Earnings and Valuation

This table compares Fidelity D&D Bancorp and Byline Bancorp”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fidelity D&D Bancorp	$140.40 million	1.91	$28.20 million	$4.87	9.53
Byline Bancorp	$633.15 million	2.38	$130.05 million	$2.88	11.43

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

Dividends

Fidelity D&D Bancorp pays an annual dividend of $1.72 per share and has a dividend yield of 3.7%. Byline Bancorp pays an annual dividend of $0.48 per share and has a dividend yield of 1.5%. Fidelity D&D Bancorp pays out 35.3% of its earnings in the form of a dividend. Byline Bancorp pays out 16.7% 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. Fidelity D&D Bancorp has increased its dividend for 10 consecutive years and Byline Bancorp has increased its dividend for 1 consecutive years. Fidelity D&D Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

Fidelity D&D Bancorp has a beta of 0.91, suggesting that its stock price is 9% less volatile than the S&P 500. Comparatively, Byline Bancorp has a beta of 0.87, suggesting that its stock price is 13% less volatile than the S&P 500.

Summary

Byline Bancorp beats Fidelity D&D Bancorp on 13 of the 18 factors compared between the two stocks.

About Fidelity D&D Bancorp

Fidelity D&D Bancorp, Inc. is a holding company, which engages in the provision of commercial banking services. It operates through the following segments: Commercial and Industrial, Commercial Real Estate, Consumer, and Residential Real Estate. The Commercial and Industrial segment refers to identified historic and/or the projected cash flows of the borrower and secondarily to the underlying collateral provided by the borrower. The Commercial Real Estate segment offers finances purchase of real estate, refinance existing obligations, and/or to provide capital. The Consumer segment includes home equity installment loans and lines of credit. The Residential Real Estate segment operates as a secured first lien position of the borrower’s residential real estate. The company was founded in 1902 and is headquartered in Dunmore, PA.

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.