State Street (NYSE:STT) vs. M&T Bank (NYSE:MTB) Head to Head Contrast

State Street (NYSE:STT) and M&T Bank (NYSE:MTB) are both large-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, institutional ownership, dividends, risk, analyst recommendations, earnings and valuation.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
State Street	12.85%	12.79%	0.84%
M&T Bank	19.86%	10.18%	1.28%

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
State Street	1	6	7	0	2.43
M&T Bank	1	7	13	0	2.57

State Street currently has a consensus price target of $109.92, indicating a potential upside of 0.69%. M&T Bank has a consensus price target of $211.48, indicating a potential upside of 5.30%. Given M&T Bank’s stronger consensus rating and higher possible upside, analysts clearly believe M&T Bank is more favorable than State Street.

Dividends

State Street pays an annual dividend of $3.04 per share and has a dividend yield of 2.8%. M&T Bank pays an annual dividend of $5.40 per share and has a dividend yield of 2.7%. State Street pays out 34.1% of its earnings in the form of a dividend. M&T Bank pays out 36.2% 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. State Street has increased its dividend for 13 consecutive years. State Street is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

State Street has a beta of 1.45, suggesting that its stock price is 45% more volatile than the S&P 500. Comparatively, M&T Bank has a beta of 0.63, suggesting that its stock price is 37% less volatile than the S&P 500.

Valuation & Earnings

This table compares State Street and M&T Bank”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
State Street	$22.13 billion	1.41	$2.69 billion	$8.91	12.25
M&T Bank	$13.45 billion	2.40	$2.59 billion	$14.93	13.45

State Street has higher revenue and earnings than M&T Bank. State Street 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.

Insider and Institutional Ownership

87.4% of State Street shares are held by institutional investors. Comparatively, 84.7% of M&T Bank shares are held by institutional investors. 0.3% of State Street shares are held by company insiders. Comparatively, 0.5% of M&T Bank shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

M&T Bank beats State Street on 9 of the 17 factors compared between the two stocks.

About State Street

State Street Corporation, through its subsidiaries, provides a range of financial products and services to institutional investors worldwide. The company offers investment servicing products and services, including custody, accounting, regulatory reporting, investor, and performance and analytics; middle office products, such as IBOR, transaction management, loans, cash, derivatives and collateral, record keeping, and client reporting and investment analytics; finance leasing; foreign exchange, and brokerage and other trading services; securities finance and enhanced custody products; deposit and short-term investment facilities; investment manager and alternative investment manager operations outsourcing; performance, risk, and compliance analytics; and financial data management to support institutional investors. It also engages in the provision of portfolio management and risk analytics, as well as trading and post-trade settlement services with integrated compliance and managed data. In addition, the company offers investment management strategies and products, such as core and enhanced indexing, multi-asset strategies, active quantitative and fundamental active capabilities, and alternative investment strategies. Further, it provides services and solutions, including environmental, social, and governance investing; defined benefit and defined contribution; and global fiduciary solutions, as well as exchange-traded funds under the SPDR ETF brand. The company provides its products and services to mutual funds, collective investment funds, UCITS, hedge funds and other investment pools, corporate and public retirement plans, insurance companies, foundations, endowments, and investment managers. State Street Corporation was founded in 1792 and is headquartered in Boston, Massachusetts.

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: Commercial Bank, Retail Bank, Institutional Services and Wealth Management, and All Other. The Commercial Bank segment offers a wide range of credit products and banking services to middle-market and large commercial customers, mainly within the markets served by the company. The Retail Bank segment refers to the services to consumers and small businesses through the company’s branch network and several other delivery channels such as telephone banking, internet banking, and ATMs. The Institutional Services and Wealth Management segment relates to helping high net worth individuals, institutions, and families grow, preserve, and transfer wealth. The All Other segment reflects other activities of the company that are not directly attributable to the reported segments. The company was founded on August 30, 1856 and is headquartered in Buffalo, NY.