Comparing NBT Bancorp (NASDAQ:NBTB) and Valley National Bancorp (NASDAQ:VLY)

NBT Bancorp (NASDAQ:NBTB) and Valley National Bancorp (NASDAQ:VLY) are both mid-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, dividends, profitability, risk, institutional ownership and earnings.

Risk and Volatility

NBT Bancorp has a beta of 0.5, meaning that its share price is 50% less volatile than the S&P 500. Comparatively, Valley National Bancorp has a beta of 1.07, meaning that its share price is 7% more volatile than the S&P 500.

Insider & Institutional Ownership

58.5% of NBT Bancorp shares are owned by institutional investors. Comparatively, 61.0% of Valley National Bancorp shares are owned by institutional investors. 3.0% of NBT Bancorp shares are owned by insiders. Comparatively, 1.4% of Valley National Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

NBT Bancorp pays an annual dividend of $1.48 per share and has a dividend yield of 3.6%. Valley National Bancorp pays an annual dividend of $0.44 per share and has a dividend yield of 3.7%. NBT Bancorp pays out 44.8% of its earnings in the form of a dividend. Valley National Bancorp pays out 43.6% 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. NBT Bancorp has raised its dividend for 12 consecutive years. Valley National Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares NBT Bancorp and Valley National Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NBT Bancorp	18.67%	10.86%	1.25%
Valley National Bancorp	17.11%	7.92%	0.92%

Analyst Ratings

This is a summary of current recommendations and price targets for NBT Bancorp and Valley National Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NBT Bancorp	0	3	3	0	2.50
Valley National Bancorp	0	3	12	2	2.94

NBT Bancorp currently has a consensus target price of $50.33, suggesting a potential upside of 22.38%. Valley National Bancorp has a consensus target price of $14.40, suggesting a potential upside of 20.70%. Given NBT Bancorp’s higher probable upside, equities research analysts plainly believe NBT Bancorp is more favorable than Valley National Bancorp.

Earnings & Valuation

This table compares NBT Bancorp and Valley National Bancorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NBT Bancorp	$906.48 million	2.37	$169.24 million	$3.30	12.46
Valley National Bancorp	$2.03 billion	3.27	$597.98 million	$1.01	11.81

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

Summary

Valley National Bancorp beats NBT Bancorp on 10 of the 18 factors compared between the two stocks.

About NBT Bancorp

NBT Bancorp Inc., a financial holding company, provides commercial banking, retail banking, and wealth management services. Its deposit products include demand deposit, savings, negotiable order of withdrawal, money market deposit, and certificate of deposit accounts. The company's loan portfolio comprises indirect and direct consumer, home equity, mortgages, business banking loans, and commercial loans; commercial and industrial, commercial real estate, agricultural, and commercial construction loans; and residential real estate loans. It also provides trust and investment services; financial planning and life insurance services; and retirement plan administration and recordkeeping services. In addition, the company offers insurance products comprising personal property and casualty, business liability, and commercial insurance, as well as other products and services through 24-hour online, mobile, and telephone channels that enable customers to check balances, make deposits, transfer funds, pay bills, access statements, apply for loans, and access various other products and services. Further, it operates as a property management and passive investment company, as well as investment advisor that provides investment management and financial consulting services. The company operates in upstate New York, northeastern Pennsylvania, southern New Hampshire, western Massachusetts, Vermont, southern Maine, and central and northwestern Connecticut. NBT Bancorp Inc. was founded in 1856 and is headquartered in Norwich, New York.

About Valley National Bancorp

Valley National Bancorp operates as the holding company for Valley National Bank that provides various commercial, private banking, retail, insurance, and wealth management financial services products. It operates through Consumer Banking, Commercial Banking, and Treasury and Corporate other segments. The company offers non-interest bearing, savings, NOW, money market, and time deposit accounts; commercial and industrial, commercial real estate, residential mortgage, and automobile loans; loans secured by the cash surrender value of life insurance; home equity loans and lines of credit; automobile financing; and secured and unsecured other consumer loans. It also invests in various securities and interest-bearing deposits with other banks; and provides international banking services, such as standby and documentary letters of credit, and related products, as well as foreign exchange transactions, documentary collections, and foreign wire transfers services. In addition, the company offers investment services for individuals and small to medium sized businesses; and trusts investment strategies designed for various investment profiles and objectives. Further, it provides trust services, such as living and testamentary trusts, investment management, custodial and escrow services, and estate administration to individuals; tax credit advisory services; brokerage services; property and casualty, life, health, and title insurance agency services; and health care equipment lending and other commercial equipment leasing services, as well as owns real estate related investments. Additionally, the company offers online, mobile, and telephone banking services; receivable, payment, and security solution, merchant, payroll processing, and liquidity services; credit cards; and drive-in and night deposit, automated teller machine, remote deposit capture, and safe deposit facility services. Valley National Bancorp was founded in 1927 and is headquartered in Morristown, New Jersey.