Pathfinder Bancorp (NASDAQ:PBHC) vs. Bank of N.T. Butterfield & Son (NYSE:NTB) Critical Analysis

Bank of N.T. Butterfield & Son (NYSE:NTB) and Pathfinder Bancorp (NASDAQ:PBHC) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, analyst recommendations, earnings, profitability and dividends.

Dividends

Bank of N.T. Butterfield & Son pays an annual dividend of $2.00 per share and has a dividend yield of 3.3%. Pathfinder Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 2.5%. Bank of N.T. Butterfield & Son pays out 35.1% of its earnings in the form of a dividend. Pathfinder Bancorp pays out -190.5% 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. Pathfinder Bancorp has increased its dividend for 1 consecutive years.

Profitability

This table compares Bank of N.T. Butterfield & Son and Pathfinder Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bank of N.T. Butterfield & Son	29.34%	22.43%	1.79%
Pathfinder Bancorp	-1.70%	-1.08%	-0.09%

Risk and Volatility

Bank of N.T. Butterfield & Son has a beta of 0.51, indicating that its stock price is 49% less volatile than the S&P 500. Comparatively, Pathfinder Bancorp has a beta of 0.13, indicating that its stock price is 87% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and price targets for Bank of N.T. Butterfield & Son and Pathfinder Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bank of N.T. Butterfield & Son	0	3	0	1	2.50
Pathfinder Bancorp	0	1	0	0	2.00

Bank of N.T. Butterfield & Son currently has a consensus target price of $63.50, suggesting a potential upside of 3.20%. Given Bank of N.T. Butterfield & Son’s stronger consensus rating and higher probable upside, equities analysts clearly believe Bank of N.T. Butterfield & Son is more favorable than Pathfinder Bancorp.

Valuation & Earnings

This table compares Bank of N.T. Butterfield & Son and Pathfinder Bancorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bank of N.T. Butterfield & Son	$800.02 million	3.22	$231.94 million	$5.69	10.81
Pathfinder Bancorp	$79.15 million	0.98	-$1.93 million	($0.21)	-75.19

Bank of N.T. Butterfield & Son has higher revenue and earnings than Pathfinder Bancorp. Pathfinder Bancorp is trading at a lower price-to-earnings ratio than Bank of N.T. Butterfield & Son, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

62.7% of Bank of N.T. Butterfield & Son shares are held by institutional investors. Comparatively, 26.7% of Pathfinder Bancorp shares are held by institutional investors. 1.2% of Bank of N.T. Butterfield & Son shares are held by insiders. Comparatively, 15.7% of Pathfinder Bancorp shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Bank of N.T. Butterfield & Son beats Pathfinder Bancorp on 14 of the 17 factors compared between the two stocks.

About Bank of N.T. Butterfield & Son

The Bank of N.T. Butterfield & Son Ltd. provides community banking and wealth management business. The firm operates through the following geographical segments: Bermuda, the Cayman Islands, Channel Islands and the UK, and Other. The Bermuda and Cayman segments offer retail banking and wealth management. The Channel Islands and the UK segment refers to the retail and corporate banking and wealth management. The Other segment includes operations in the jurisdictions of The Bahamas, Canada, Mauritius, Singapore and Switzerland. The company was founded in 1858 and is headquartered in Hamilton, Bermuda.

About Pathfinder Bancorp

Pathfinder Bancorp, Inc. operates as a bank holding company for Pathfinder Bank that provides various banking and financial products and services in New York. The company's deposit products include checking, savings, and money market deposit accounts; certificates of deposit; and demand and time deposits. Its loan portfolio comprises commercial real estate, commercial, residential real estate, construction, and tax-exempt loans; home equity loans and junior liens; and consumer loans comprising automobile, recreational vehicles, and unsecured personal loans, as well as unsecured lines of credit and loans secured by deposit accounts. The company is also involved in the property, casualty, and life insurance brokerage business. It primarily serves individuals, families, small to mid-size businesses, and municipalities. The company was founded in 1859 and is headquartered in Oswego, New York.