Analyzing NatWest Group (OTCMKTS:RBSPF) and Old Second Bancorp (NASDAQ:OSBC)

Old Second Bancorp (NASDAQ:OSBC) and NatWest Group (OTCMKTS:RBSPF) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, risk, dividends, institutional ownership, earnings, valuation and analyst recommendations.

Risk and Volatility

Old Second Bancorp has a beta of 0.7, indicating that its share price is 30% less volatile than the S&P 500. Comparatively, NatWest Group has a beta of 0.95, indicating that its share price is 5% less volatile than the S&P 500.

Insider & Institutional Ownership

67.8% of Old Second Bancorp shares are held by institutional investors. 3.6% of Old Second Bancorp shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings for Old Second Bancorp and NatWest Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Old Second Bancorp	0	2	5	0	2.71
NatWest Group	0	0	1	0	3.00

Old Second Bancorp currently has a consensus target price of $25.40, indicating a potential upside of 1.77%. Given Old Second Bancorp’s higher probable upside, equities analysts plainly believe Old Second Bancorp is more favorable than NatWest Group.

Valuation and Earnings

This table compares Old Second Bancorp and NatWest Group”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Old Second Bancorp	$401.54 million	3.16	$80.31 million	$1.74	14.34
NatWest Group	$38.91 billion	1.82	$7.69 billion	$1.00	8.82

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

Profitability

This table compares Old Second Bancorp and NatWest Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Old Second Bancorp	20.22%	12.79%	1.65%
NatWest Group	20.10%	14.01%	0.82%

Summary

Old Second Bancorp beats NatWest Group on 9 of the 14 factors compared between the two stocks.

About Old Second Bancorp

Old Second Bancorp, Inc. operates as the bank holding company for Old Second National Bank that provides community banking services. It offers demand, NOW, money market, savings, time deposit, individual retirement, and checking accounts, as well as certificates of deposit accounts. The company also provides commercial loans; lease financing receivables; commercial real estate loans; construction loans; residential real estate loans, such as residential first mortgage and second mortgage loans; home equity line of credit; consumer loans, including motor vehicle, home improvement, and signature loans; installment and agricultural loans; residential mortgages; and overdraft checking. In addition, it offers safe deposit services; trust and wealth management services; and money orders, cashier’s checks, foreign currency, direct deposits, discount brokerage, debit and credit cards, and other services, as well as acquires the U.S. treasury notes and bonds. Further, the company provides online and mobile banking; corporate cash management products, including remote and mobile deposits capture, investment sweep accounts, zero balance accounts, automated tax payments, automatic teller machines access, telephone banking, lockbox accounts, automated clearing house transactions, account reconciliation, controlled disbursement, detail and general information reporting, foreign and domestic wire transfers, and vault services for currency and coin; and investment, agency, and custodial services for individual, corporate, and not-for-profit clients. Old Second Bancorp, Inc. was incorporated in 1981 and is headquartered in Aurora, Illinois.

About NatWest Group

NatWest Group plc, together with its subsidiaries, provides banking and financial products and services to personal, commercial, corporate, and institutional customers in the United Kingdom and internationally. It operates through Retail Banking, Private Banking, and Commercial & Institutional segments. The Retail Banking segment offers a range of banking products and related financial services, such as current accounts, mortgages, personal unsecured lending, and personal deposits, as well as mobile and online banking services. The Private Banking segment provides private banking and wealth management products for high-net-worth individuals and their business interests. The Commercial & Institutional segment offers banking and financial solutions to large corporate organisations, multi-nationals, and financial institutions. The company was formerly known as The Royal Bank of Scotland Group plc and changed its name to NatWest Group plc in July 2020. NatWest Group plc was founded in 1727 and is headquartered in Edinburgh, the United Kingdom.