Ames National (NASDAQ:ATLO) and Sterling Bancorp (NYSE:STL) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their dividends, analyst recommendations, valuation, profitability, earnings, institutional ownership and risk.

Valuation and Earnings

This table compares Ames National and Sterling Bancorp’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ames National $57.63 million 4.42 $17.01 million N/A N/A
Sterling Bancorp $1.31 billion 3.26 $447.25 million $2.00 10.21

Sterling Bancorp has higher revenue and earnings than Ames National.

Analyst Recommendations

This is a breakdown of recent ratings for Ames National and Sterling Bancorp, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ames National 0 0 0 0 N/A
Sterling Bancorp 0 1 3 0 2.75

Sterling Bancorp has a consensus target price of $26.50, indicating a potential upside of 29.84%. Given Sterling Bancorp’s higher possible upside, analysts clearly believe Sterling Bancorp is more favorable than Ames National.

Volatility & Risk

Ames National has a beta of 0.57, indicating that its share price is 43% less volatile than the S&P 500. Comparatively, Sterling Bancorp has a beta of 1.25, indicating that its share price is 25% more volatile than the S&P 500.

Institutional and Insider Ownership

23.9% of Ames National shares are owned by institutional investors. Comparatively, 98.9% of Sterling Bancorp shares are owned by institutional investors. 4.8% of Ames National shares are owned by company insiders. Comparatively, 2.1% of Sterling Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Dividends

Ames National pays an annual dividend of $0.92 per share and has a dividend yield of 3.3%. Sterling Bancorp pays an annual dividend of $0.28 per share and has a dividend yield of 1.4%. Sterling Bancorp pays out 14.0% of its earnings in the form of a dividend. Ames National has raised its dividend for 3 consecutive years. Ames National is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Ames National 29.56% 10.08% 1.20%
Sterling Bancorp 33.95% 10.54% 1.43%

Summary

Sterling Bancorp beats Ames National on 9 of the 15 factors compared between the two stocks.

Ames National Company Profile

Ames National Corporation operates as a multi-bank holding company that provides banking services primarily in the central, north-central, and south-central Iowa counties of Boone, Clarke, Hancock, Marshall, Polk, and Story. The company offers a range of deposits, including checking, savings, and accounts; and time deposits of various types, including money market accounts and certificates of deposit. It also provides loans, such as short-term and medium-term commercial and agricultural real estate loans, residential real estate loans, equipment loans, vehicle loans, personal loans and lines of credit, and home improvement loans, as well as agricultural and business operating loans and lines of credit; and originates mortgage loans for sale into the secondary market. In addition, the company offers cash management, merchant credit card processing, safe deposit box, wire transfer, direct deposit of payroll and social security check, and automated/video teller machine access services; and automatic drafts for various accounts, as well as trust services comprising wealth management services. Further, it provides farm management, investment, and custodial services for individuals, businesses, and non-profit organizations; and online management, mobile banking, and private banking services. The company was founded in 1903 and is based in Ames, Iowa.

Sterling Bancorp Company Profile

Sterling Bancorp operates as the bank holding company for Sterling National Bank that provides various banking products and services to commercial, consumer, and municipal clients in the United States. The company accepts deposit products, including checking, savings, money market, time, and interest and non-interest bearing demand deposits, as well as certificates of deposit and mortgage escrow funds. It originates various loans that comprise residential and commercial mortgage loans; commercial and industrial, asset-based, payroll finance, warehouse, factored receivables, equipment finance, public sector, and commercial real estate and multi-family loans; consumer loans, such as homeowner loans, home equity lines of credit, new and used automobile loans, and personal unsecured loans; and acquisition, development, and construction loans. In addition, the company engages in the third-party provider to sell mutual funds and annuities; and provision of annuity and wealth management products. As of December 31, 2018, it operated 106 full-service retail and commercial financial centers, which comprise 24 offices are located in Nassau County, 22 in Suffolk County, 14 in Queens County, 12 in Westchester County, 11 in Kings County, 8 in Rockland County, 6 in Orange County, 3 in New York City, and 2 in Bronx County, as well as 1 office each in Sullivan, Ulster, and Putnam Counties in New York; and 1 office in Bergen County, New Jersey. The company was founded in 1888 and is based in Montebello, New York.

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