Head to Head Contrast: Wintrust Financial (NASDAQ:WTFC) & M&T Bank (NYSE:MTB)

M&T Bank (NYSE:MTB) and Wintrust Financial (NASDAQ:WTFC) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, dividends, valuation, analyst recommendations, institutional ownership, risk and profitability.

Dividends

M&T Bank pays an annual dividend of $5.40 per share and has a dividend yield of 2.9%. Wintrust Financial pays an annual dividend of $2.00 per share and has a dividend yield of 1.7%. M&T Bank pays out 36.9% of its earnings in the form of a dividend. Wintrust Financial pays out 19.4% 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. Wintrust Financial has raised its dividend for 12 consecutive years.

Insider and Institutional Ownership

84.7% of M&T Bank shares are held by institutional investors. Comparatively, 93.5% of Wintrust Financial shares are held by institutional investors. 0.8% of M&T Bank shares are held by insiders. Comparatively, 1.5% of Wintrust Financial shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current recommendations for M&T Bank and Wintrust Financial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
M&T Bank	1	8	8	0	2.41
Wintrust Financial	0	2	9	2	3.00

M&T Bank currently has a consensus price target of $221.68, suggesting a potential upside of 20.30%. Wintrust Financial has a consensus price target of $133.69, suggesting a potential upside of 13.91%. Given M&T Bank’s higher possible upside, research analysts clearly believe M&T Bank is more favorable than Wintrust Financial.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
M&T Bank	19.24%	10.12%	1.25%
Wintrust Financial	17.52%	12.60%	1.13%

Earnings & Valuation

This table compares M&T Bank and Wintrust Financial”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
M&T Bank	$9.23 billion	3.28	$2.59 billion	$14.63	12.60
Wintrust Financial	$2.45 billion	3.18	$695.04 million	$10.31	11.38

M&T Bank has higher revenue and earnings than Wintrust Financial. Wintrust Financial 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.

Volatility & Risk

M&T Bank has a beta of 0.79, indicating that its share price is 21% less volatile than the S&P 500. Comparatively, Wintrust Financial has a beta of 1.19, indicating that its share price is 19% more volatile than the S&P 500.

About M&T Bank

M&T Bank Corp. operates as a bank holding company, which engages in the provision of retail and commercial banking, trust, wealth management and investment services. It operates through the following segments: Business Banking, Commercial Banking, Commercial Real Estate, Discretionary Portfolio, Residential Mortgage Banking, and Retail Banking. The Business Banking segment provides services to small businesses and professionals through the company’s branch network, business banking centers, and other delivery channels such as telephone banking, Internet banking and automated teller machines. The Commercial Banking segment offers credit products and banking services for middle-market and large commercial customers. The Commercial Real Estate segment includes credit and deposit services to its customers. The Discretionary Portfolio segment consists of investment and trading securities, residential mortgage loans and other assets, short-term and long-term borrowed funds, brokered certificates of deposit and interest rate swap agreements related thereto, and Cayman Islands branch deposits. The Residential Mortgage Banking segment consists of residential mortgage loans and sells substantially all of those loans in the secondary market to investors. The Retail Banking segment offers services to consumers through several delivery channels which include branch offices, automated teller machines, telephone banking, and Internet banking. The company was founded on August 30, 1856, and is headquartered in Buffalo, NY.

About Wintrust Financial

Wintrust Financial Corporation operates as a financial holding company. It operates in three segments: Community Banking, Specialty Finance, and Wealth Management. The Community Banking segment offers non-interest bearing deposits, non-brokered interest-bearing transaction accounts, and savings and domestic time deposits; home equity, consumer, and real estate loans; safe deposit facilities; and automatic teller machine (ATM), online and mobile banking, and other services. It also engages in the retail origination and purchase of residential mortgages; and provision of lending, deposits, and treasury management services to condominium, homeowner, and community associations, as well as asset-based lending for middle-market companies. In addition, this segment offers loan and deposit services to mortgage brokerage companies; lending to restaurant franchisees; direct leasing; small business administration loans; commercial mortgages and construction loans; and financial solutions. It provides personal and commercial banking services primarily to individuals, small to mid-sized businesses, local governmental units, and institutional clients. The Specialty Finance segment offers commercial and life insurance premiums financing for businesses and individuals; accounts receivable financing, value-added, and out-sourced administrative services; other specialty finance services; equipment financing through structured loan and lease products; and property and casualty premium financing; as well as data processing of payrolls, billing, and cash management services to temporary staffing industry. The Wealth Management segment provides wealth management services, such as trust and investment, asset management, tax-deferred exchange, securities brokerage, and retirement plan services. Wintrust Financial Corporation was founded in 1991 and is headquartered in Rosemont, Illinois.