Analyzing Lakeland Bancorp (NASDAQ:LBAI) & M&T Bank (NYSE:MTB)

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

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
M&T Bank	$12.75 billion	1.91	$2.74 billion	$14.79	9.90
Lakeland Bancorp	$516.18 million	1.58	$84.74 million	$1.28	9.78

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
M&T Bank	19.52%	10.68%	1.25%
Lakeland Bancorp	16.00%	7.40%	0.77%

Volatility and Risk

M&T Bank has a beta of 0.8, indicating that its stock price is 20% less volatile than the S&P 500. Comparatively, Lakeland Bancorp has a beta of 0.85, indicating that its stock price is 15% less volatile than the S&P 500.

Institutional & Insider Ownership

84.7% of M&T Bank shares are held by institutional investors. Comparatively, 59.6% of Lakeland Bancorp shares are held by institutional investors. 0.8% of M&T Bank shares are held by insiders. Comparatively, 5.1% of Lakeland Bancorp shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

M&T Bank pays an annual dividend of $5.20 per share and has a dividend yield of 3.6%. Lakeland Bancorp pays an annual dividend of $0.58 per share and has a dividend yield of 4.6%. M&T Bank pays out 35.2% of its earnings in the form of a dividend. Lakeland Bancorp pays out 45.3% 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. M&T Bank has increased its dividend for 1 consecutive years.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for M&T Bank and Lakeland Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
M&T Bank	0	9	5	0	2.36
Lakeland Bancorp	0	1	0	0	2.00

M&T Bank currently has a consensus price target of $158.48, suggesting a potential upside of 8.26%. Lakeland Bancorp has a consensus price target of $14.15, suggesting a potential upside of 13.02%. Given Lakeland Bancorp’s higher possible upside, analysts plainly believe Lakeland Bancorp is more favorable than M&T Bank.

Summary

M&T Bank beats Lakeland Bancorp on 13 of the 17 factors compared between the two stocks.

About M&T Bank

M&T Bank Corporation operates as a bank holding company for Manufacturers and Traders Trust Company and Wilmington Trust, National Association that engages in the provision of retail and commercial banking products and services in the United States. The company operates through three segments: Commercial Bank, Retail Bank, and Institutional Services and Wealth Management. It offers a range of credit products and banking services, such as commercial lending and leasing, letters of credits, commercial real estate loans, and credit facilities secured by various commercial real estate to middle-market and large commercial customers. The company also provides customers deposit products, including demand, savings and time accounts, and other services; automobile and recreational finance loans, home equity loans and lines of credit, credit cards, and other loan products, as well as residential mortgage and real estate loans; business loans, cash management, payroll, and direct deposit services to consumers and small businesses through branch network, telephone banking, internet banking, and automated teller machines. In addition, it offers trustee, agency, investment management, security brokerage, and administrative services; personal trust, planning, fiduciary, asset management, family office, and other services; and investment products, including mutual funds and annuities, and other services for corporations and institutions, investment bankers, corporate tax, finance and legal executives, and other institutional clients. The company was founded in 1856 and is headquartered in Buffalo, New York.

About Lakeland Bancorp

Lakeland Bancorp, Inc. operates as the bank holding company for Lakeland Bank that provides financial products and services for businesses and consumers. It provides commercial banking services, including savings, money market, and time accounts, as well as demand deposits. The company also offers lending services, including commercial real estate loans, commercial and industrial loans, short and medium term loans, lines of credit, letters of credit, inventory and accounts receivable financing, real estate construction loans, residential mortgage loans, small business administration loans, and merchant credit card services; financing solutions to small and medium-sized companies; online banking, mobile banking, and wire transfer services to the business community and municipal relationships; and cash management services, such as remote capture of deposits and overnight sweep repurchase agreements. In addition, it provides consumer banking services comprising checking accounts, savings accounts, interest-bearing checking accounts, money market accounts, certificates of deposit, online banking, secured and unsecured loans, consumer installment loans, mortgage loans, and safe deposit services. Further, the company offers investment advisory services; life insurance products; and non-deposit products, such as securities brokerage services, including mutual funds, variable annuities, and insurance. The company was founded in 1969 and is headquartered in Oak Ridge, New Jersey.