Old Second Bancorp (NASDAQ: OSBC) and Middleburg Financial Corp. (NASDAQ:MBRG) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, institutional ownership, profitabiliy, analyst recommendations, risk, valuation and dividends.

Profitability

This table compares Old Second Bancorp and Middleburg Financial Corp.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Old Second Bancorp 16.00% 9.73% 0.76%
Middleburg Financial Corp. 8.07% 3.43% 0.34%

Risk and Volatility

Old Second Bancorp has a beta of 1.31, indicating that its stock price is 31% more volatile than the S&P 500. Comparatively, Middleburg Financial Corp. has a beta of 0.55, indicating that its stock price is 45% less volatile than the S&P 500.

Valuation & Earnings

This table compares Old Second Bancorp and Middleburg Financial Corp.’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Old Second Bancorp $97.41 million 3.57 N/A N/A N/A
Middleburg Financial Corp. N/A N/A N/A $1.13 34.26

Insider & Institutional Ownership

65.7% of Old Second Bancorp shares are held by institutional investors. Comparatively, 29.1% of Middleburg Financial Corp. shares are held by institutional investors. 3.6% of Old Second Bancorp shares are held by insiders. Comparatively, 5.1% of Middleburg Financial Corp. shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and recommmendations for Old Second Bancorp and Middleburg Financial Corp., as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Old Second Bancorp 0 1 0 0 2.00
Middleburg Financial Corp. 0 0 0 0 N/A

Old Second Bancorp presently has a consensus target price of $11.50, suggesting a potential downside of 2.13%. Given Old Second Bancorp’s higher probable upside, research analysts plainly believe Old Second Bancorp is more favorable than Middleburg Financial Corp..

Dividends

Old Second Bancorp pays an annual dividend of $0.04 per share and has a dividend yield of 0.3%. Middleburg Financial Corp. pays an annual dividend of $0.52 per share and has a dividend yield of 1.3%. Middleburg Financial Corp. pays out 46.0% of its earnings in the form of a dividend.

Summary

Old Second Bancorp beats Middleburg Financial Corp. on 8 of the 10 factors compared between the two stocks.

Old Second Bancorp Company Profile

Old Second Bancorp, Inc. is a bank holding company. The Company conducts a full service community banking and trust business through its subsidiaries, including Old Second National Bank (the Bank), Old Second Capital Trust I, Old Second Capital Trust II and Old Second Affordable Housing Fund, L.L.C. The Bank’s full service banking businesses include the customary consumer and commercial products and services that banking institutions provide, including demand, negotiable order of withdrawal, money market and individual retirement accounts; commercial, industrial, consumer and real estate lending, including installment loans, agricultural loans, lines of credit and overdraft checking; safe deposit operations, and a range of additional services tailored to the needs of individual customers, such as the acquisition of the United States Treasury notes and bonds, money orders, cashiers’ checks and foreign currency, direct deposit, debit cards, credit cards and other special services.

Middleburg Financial Corp. Company Profile

Middleburg Financial Corporation is a bank holding company. The Company conducts its primary operations through two subsidiaries, Middleburg Bank and Middleburg Investment Group, Inc. The Company has another subsidiary, MFC Capital Trust II. The Company’s segments are Commercial & Retail Banking, which includes loans, investment securities and deposit accounts; Wealth Management, including wealth management activities, and Mortgage Banking, which includes mortgage banking activities. The Company, through its subsidiaries, offers a range of banking, fiduciary and investment management services to both individuals and small businesses. The Company’s business activities include commercial and retail banking services through Middleburg Bank, wealth management services through Middleburg Investment Group, Inc., and mortgage banking services. Other banking services available to its clients include Internet banking, travelers’ checks, safe deposit rentals, notary public and wire services.

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