Head to Head Analysis: Old Second Bancorp (NASDAQ:OSBC) and Heartland BancCorp. (OTCMKTS:HLAN)

Old Second Bancorp (NASDAQ:OSBC) and Heartland BancCorp. (OTCMKTS:HLAN) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, valuation, earnings, dividends, risk, analyst recommendations and institutional ownership.

Earnings and Valuation

This table compares Old Second Bancorp and Heartland BancCorp.”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Old Second Bancorp	$311.24 million	3.13	$85.26 million	$1.51	12.26
Heartland BancCorp.	$119.21 million	2.74	$20.26 million	$9.76	16.39

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

Dividends

Old Second Bancorp pays an annual dividend of $0.28 per share and has a dividend yield of 1.5%. Heartland BancCorp. pays an annual dividend of $0.76 per share and has a dividend yield of 0.5%. Old Second Bancorp pays out 18.5% of its earnings in the form of a dividend. Heartland BancCorp. pays out 7.8% 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. Old Second Bancorp has raised its dividend for 1 consecutive years. Old Second Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

67.8% of Old Second Bancorp shares are owned by institutional investors. Comparatively, 7.5% of Heartland BancCorp. shares are owned by institutional investors. 3.8% of Old Second Bancorp shares are owned by company insiders. Comparatively, 22.7% of Heartland BancCorp. shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Old Second Bancorp and Heartland BancCorp.’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Old Second Bancorp	18.89%	13.10%	1.60%
Heartland BancCorp.	N/A	N/A	N/A

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Old Second Bancorp and Heartland BancCorp., as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Old Second Bancorp	0	1	4	1	3.00
Heartland BancCorp.	0	0	0	0	0.00

Old Second Bancorp presently has a consensus target price of $21.63, suggesting a potential upside of 16.77%. Given Old Second Bancorp’s stronger consensus rating and higher possible upside, equities analysts clearly believe Old Second Bancorp is more favorable than Heartland BancCorp..

Summary

Old Second Bancorp beats Heartland BancCorp. on 13 of the 17 factors compared between the two stocks.

About Old Second Bancorp

Old Second Bancorp, Inc. operates as the bank holding company for Old Second National Bank that provides community banking services. It offers demand, NOW, money market, savings, time deposit, individual retirement, and checking accounts, as well as certificates of deposit accounts. The company also provides commercial loans; lease financing receivables; commercial real estate loans; construction loans; residential real estate loans, such as residential first mortgage and second mortgage loans; home equity line of credit; consumer loans, including motor vehicle, home improvement, and signature loans; installment and agricultural loans; residential mortgages; and overdraft checking. In addition, it offers safe deposit services; trust and wealth management services; and money orders, cashier’s checks, foreign currency, direct deposits, discount brokerage, debit and credit cards, and other services, as well as acquires the U.S. treasury notes and bonds. Further, the company provides online and mobile banking; corporate cash management products, including remote and mobile deposits capture, investment sweep accounts, zero balance accounts, automated tax payments, automatic teller machines access, telephone banking, lockbox accounts, automated clearing house transactions, account reconciliation, controlled disbursement, detail and general information reporting, foreign and domestic wire transfers, and vault services for currency and coin; and investment, agency, and custodial services for individual, corporate, and not-for-profit clients. Old Second Bancorp, Inc. was incorporated in 1981 and is headquartered in Aurora, Illinois.

About Heartland BancCorp.

Heartland BancCorp operates as the bank holding company for Heartland Bank that provides various banking and financial services to individual and corporate customers. The company offers personal and business checking and savings accounts. It also provides various lending solutions comprising agricultural loans, commercial and business lending, home and personal loans, and title services. In addition, the company offers online banking, treasury management, credit and debit card, and mobile wallet services. Further, it provides education planning, insurance, wealth management, and retirement planning services. Heartland BancCorp was founded in 1911 and is based in Whitehall, Ohio.