M&T Bank (NYSE: BXS) and Bancorpsouth Bank (NYSE:BXS) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, profitability, risk, dividends, earnings and valuation.

Volatility & Risk

M&T Bank has a beta of 0.92, indicating that its share price is 8% less volatile than the S&P 500. Comparatively, Bancorpsouth Bank has a beta of 1.4, indicating that its share price is 40% more volatile than the S&P 500.

Valuation and Earnings

This table compares M&T Bank and Bancorpsouth Bank’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
M&T Bank $6.02 billion 4.09 $1.41 billion $9.35 18.31
Bancorpsouth Bank $781.02 million 3.95 $153.03 million $1.67 20.45

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

Profitability

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

Net Margins Return on Equity Return on Assets
M&T Bank 24.57% 11.80% 1.46%
Bancorpsouth Bank 21.59% 9.90% 1.16%

Analyst Recommendations

This is a summary of recent ratings and target prices for M&T Bank and Bancorpsouth Bank, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
M&T Bank 1 8 6 0 2.33
Bancorpsouth Bank 0 6 1 0 2.14

M&T Bank presently has a consensus target price of $174.79, suggesting a potential upside of 2.08%. Bancorpsouth Bank has a consensus target price of $35.17, suggesting a potential upside of 2.98%. Given Bancorpsouth Bank’s higher probable upside, analysts plainly believe Bancorpsouth Bank is more favorable than M&T Bank.

Dividends

M&T Bank pays an annual dividend of $4.00 per share and has a dividend yield of 2.3%. Bancorpsouth Bank pays an annual dividend of $0.56 per share and has a dividend yield of 1.6%. M&T Bank pays out 42.8% of its earnings in the form of a dividend. Bancorpsouth Bank pays out 33.5% 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. Bancorpsouth Bank has increased its dividend for 5 consecutive years.

Institutional & Insider Ownership

81.2% of M&T Bank shares are held by institutional investors. Comparatively, 73.7% of Bancorpsouth Bank shares are held by institutional investors. 0.5% of M&T Bank shares are held by insiders. Comparatively, 2.6% of Bancorpsouth Bank shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

M&T Bank beats Bancorpsouth Bank on 11 of the 17 factors compared between the two stocks.

M&T Bank Company Profile

M&T Bank Corporation operates as the holding company for Manufacturers and Traders Trust Company; and Wilmington Trust, National Association that provide retail and commercial banking services. The company's Business Banking segment offers deposit, lending, cash management, and other financial services to small businesses and professionals. Its Commercial Banking segment provides commercial lending and leasing, letters of credit, deposit products, and cash management services to middle-market and large commercial customers. The company's Commercial Real Estate segment offers credit services, which are secured by various multifamily residential and commercial real estates; and deposit services. Its Discretionary Portfolio segment provides securities, residential real estate loans, and other assets; short-term and long-term borrowed funds; brokered deposits; and the Cayman Islands branch deposits, as well as foreign exchange services. The company's Residential Mortgage Banking segment originates and services residential real estate loans for consumers and sells those loans in the secondary market; and purchases servicing rights to loans originated by other entities. Its Retail Banking segment offers demand, savings, and time accounts; consumer installment loans, automobile and recreational vehicle loans, home equity loans and lines of credit, and credit cards; investment products, including mutual funds and annuities; and other services. The company also provides trust and wealth management; fiduciary and custodial; investment management and advisory; and insurance agency services. It offers its services through banking offices, business banking centers, telephone and Internet banking, and automated teller machines. As of December 31, 2017, the company had 780 banking offices in the United States, a commercial banking office in Canada, and an office in the Cayman Islands. M&T Bank Corporation was founded in 1856 and is headquartered in Buffalo, New York.

Bancorpsouth Bank Company Profile

BancorpSouth Bank provides commercial banking and financial services to individuals and small-to-medium size businesses. It offers various deposit products, including interest and noninterest bearing demand deposits, and saving and other time deposits. The company also provides commercial loans, including term loans, lines of credit, equipment and receivable financing, and agricultural loans; a range of short-to-medium term secured and unsecured commercial loans to businesses for working capital, business expansion, and the purchase of equipment and machinery; and construction loans to real estate developers for the acquisition, development, and construction of residential subdivisions. In addition, it offers fixed and adjustable rate residential mortgage loans secured by owner-occupied property; residential construction loans; second mortgage loans; and home equity lines of credit, as well as non-residential consumer loans that consist of automobile, recreation vehicle, boat, personal, and deposit account secured loans, as well as issues credit cards. Further, the company operates as an agent for the sale of commercial lines of insurance; and a line of property and casualty, life, health, and employee benefits products and services. Additionally, it provides investment brokerage, and personal trust and estate services. As of April 25, 2018, the company operated through 279 full service branch locations, as well mortgage, insurance, and loan production offices in Alabama, Arkansas, Florida, Louisiana, Mississippi, Missouri, Tennessee, Texas, and Illinois. The company was formerly known as BancorpSouth, Inc. and changed its name to BancorpSouth Bank in October 2017. BancorpSouth Bank was founded in 1876 and is headquartered in Tupelo, Mississippi.

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