Contrasting Enterprise Financial Services (NASDAQ:EFSC) & Old National Bancorp (NASDAQ:ONB)

Old National Bancorp (NASDAQ:ONB) and Enterprise Financial Services (NASDAQ:EFSC) are both mid-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, valuation, analyst recommendations, earnings, risk and institutional ownership.

Volatility and Risk

Old National Bancorp has a beta of 0.89, meaning that its share price is 11% less volatile than the S&P 500. Comparatively, Enterprise Financial Services has a beta of 0.92, meaning that its share price is 8% less volatile than the S&P 500.

Dividends

Old National Bancorp pays an annual dividend of $0.56 per share and has a dividend yield of 2.5%. Enterprise Financial Services pays an annual dividend of $1.20 per share and has a dividend yield of 2.0%. Old National Bancorp pays out 33.1% of its earnings in the form of a dividend. Enterprise Financial Services pays out 22.8% 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. Enterprise Financial Services has raised its dividend for 11 consecutive years.

Profitability

This table compares Old National Bancorp and Enterprise Financial Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Old National Bancorp	17.67%	9.92%	1.13%
Enterprise Financial Services	21.28%	11.19%	1.29%

Earnings & Valuation

This table compares Old National Bancorp and Enterprise Financial Services”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Old National Bancorp	$2.96 billion	3.00	$539.19 million	$1.69	13.41
Enterprise Financial Services	$920.75 million	2.43	$185.27 million	$5.27	11.49

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

Insider and Institutional Ownership

83.7% of Old National Bancorp shares are owned by institutional investors. Comparatively, 72.2% of Enterprise Financial Services shares are owned by institutional investors. 0.9% of Old National Bancorp shares are owned by company insiders. Comparatively, 2.3% of Enterprise Financial Services shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Old National Bancorp and Enterprise Financial Services, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Old National Bancorp	0	2	6	1	2.89
Enterprise Financial Services	0	0	3	0	3.00

Old National Bancorp presently has a consensus target price of $26.40, suggesting a potential upside of 16.50%. Enterprise Financial Services has a consensus target price of $64.33, suggesting a potential upside of 6.28%. Given Old National Bancorp’s higher probable upside, equities analysts plainly believe Old National Bancorp is more favorable than Enterprise Financial Services.

About Old National Bancorp

Old National Bancorp operates as the bank holding company for Old National Bank that provides various financial services to individual and commercial customers in the United States. It accepts deposit accounts, including noninterest-bearing demand, interest-bearing checking, negotiable order of withdrawal, savings and money market, and time deposits; and offers loans, such as home equity lines of credit, residential real estate loans, consumer loans, commercial loans, commercial real estate loans, agricultural loans, letters of credit, and lease financing. The company also provides debit and automated teller machine cards, telephone access, online banking, and other electronic and mobile banking services; cash management, private banking, brokerage, trust, investment advisory, and other traditional banking services; wealth management, investment, and foreign currency services; and treasury management, merchant, and capital markets services, as well as community development lending and equity investment solutions. The company was founded in 1834 and is headquartered in Evansville, Indiana.

About Enterprise Financial Services

Enterprise Financial Services Corp operates as the holding company for Enterprise Bank & Trust that offers banking and wealth management services to individuals and corporate customers primarily in Arizona, California, Florida, Kansas, Missouri, Nevada, and New Mexico. It provides checking, savings, money market accounts, and certificates of deposit. The company also provides commercial and industrial, commercial real estate, real estate construction and development, residential real estate, small business administration, agricultural, consumer, and other loan products. In addition, it offers treasury management and international trade services; tax credit brokerage services; life insurance premium and sponsor finance; tax credit related lending; other deposit accounts, such as community associations, property management, third party escrow, and trust services; treasury management product and services; customized solutions and products; cash management; fiduciary, investment management, and financial advisory services; and customer hedging products, including international banking, card services, and tax credit businesses. Further, the company provides online, device applications, text, and voice banking; remote deposit capture; internet banking, mobile banking, cash management, positive pay services, fraud detection and prevention, automated payables, check image, and statement and document imaging; and controlled disbursements, repurchase agreements, and sweep investment accounts. Enterprise Financial Services Corp was founded in 1988 and is headquartered in Clayton, Missouri.