Bank7 (NASDAQ:BSVN) versus M&T Bank (NYSE:MTB) Critical Review

M&T Bank (NYSE:MTB) and Bank7 (NASDAQ:BSVN) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, risk, earnings, valuation, institutional ownership and dividends.

Volatility & Risk

M&T Bank has a beta of 0.76, indicating that its stock price is 24% less volatile than the S&P 500. Comparatively, Bank7 has a beta of 1.47, indicating that its stock price is 47% more volatile than the S&P 500.

Dividends

M&T Bank pays an annual dividend of $5.40 per share and has a dividend yield of 2.7%. Bank7 pays an annual dividend of $0.96 per share and has a dividend yield of 2.1%. M&T Bank pays out 40.0% of its earnings in the form of a dividend. Bank7 pays out 25.3% 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.

Earnings and Valuation

This table compares M&T Bank and Bank7″s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
M&T Bank	$12.75 billion	2.59	$2.74 billion	$13.51	14.75
Bank7	$101.38 million	4.16	$28.27 million	$3.80	11.88

M&T Bank has higher revenue and earnings than Bank7. Bank7 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.

Profitability

This table compares M&T Bank and Bank7’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
M&T Bank	17.82%	9.52%	1.15%
Bank7	24.22%	19.13%	2.05%

Institutional & Insider Ownership

84.7% of M&T Bank shares are held by institutional investors. Comparatively, 23.5% of Bank7 shares are held by institutional investors. 0.8% of M&T Bank shares are held by company insiders. Comparatively, 44.0% of Bank7 shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current recommendations and price targets for M&T Bank and Bank7, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
M&T Bank	1	9	7	0	2.35
Bank7	0	1	2	0	2.67

M&T Bank currently has a consensus price target of $211.58, indicating a potential upside of 6.17%. Bank7 has a consensus price target of $41.33, indicating a potential downside of 8.46%. Given M&T Bank’s higher possible upside, equities research analysts clearly believe M&T Bank is more favorable than Bank7.

About M&T Bank

M&T Bank Corporation operates as a bank holding company for Manufacturers and Traders Trust Company and Wilmington Trust, National Association that engages in the provision of retail and commercial banking products and services in the United States. The company operates through three segments: Commercial Bank, Retail Bank, and Institutional Services and Wealth Management. It offers a range of credit products and banking services, such as commercial lending and leasing, letters of credits, commercial real estate loans, and credit facilities secured by various commercial real estate to middle-market and large commercial customers. The company also provides customers deposit products, including demand, savings and time accounts, and other services; automobile and recreational finance loans, home equity loans and lines of credit, credit cards, and other loan products, as well as residential mortgage and real estate loans; business loans, cash management, payroll, and direct deposit services to consumers and small businesses through branch network, telephone banking, internet banking, and automated teller machines. In addition, it offers trustee, agency, investment management, security brokerage, and administrative services; personal trust, planning, fiduciary, asset management, family office, and other services; and investment products, including mutual funds and annuities, and other services for corporations and institutions, investment bankers, corporate tax, finance and legal executives, and other institutional clients. The company was founded in 1856 and is headquartered in Buffalo, New York.

About Bank7

Bank7 Corp. operates as a bank holding company for Bank7 that provides banking and financial services to individual and corporate customers. It offers commercial deposit, commercial checking, money market, and other deposit accounts; and retail deposit services, such as certificates of deposit, money market accounts, checking accounts, negotiable order of withdrawal accounts, savings accounts, and automated teller machine access. The company also provides commercial real estate, hospitality, energy, and commercial and industrial lending services; consumer lending services to individuals for personal and household purposes comprising residential real estate loans and mortgage banking services, personal lines of credit, loans for the purchase of automobiles, and other installment loans, as well as secured and unsecured term loans and home improvement loans. It operates through a network of full-service branches in Oklahoma, the Dallas/Fort Worth, Texas metropolitan area, and Kansas. The company was formerly known as Haines Financial Corp. Bank7 Corp. was founded in 1901 and is headquartered in Oklahoma City, Oklahoma.