Critical Review: Avidia Bancorp (NYSE:AVBC) & M&T Bank (NYSE:MTB)

M&T Bank (NYSE:MTB) and Avidia Bancorp (NYSE:AVBC) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their dividends, valuation, profitability, earnings, institutional ownership, analyst recommendations and risk.

Dividends

M&T Bank pays an annual dividend of $6.00 per share and has a dividend yield of 2.7%. Avidia Bancorp pays an annual dividend of $0.24 per share and has a dividend yield of 1.1%. M&T Bank pays out 31.3% of its earnings in the form of a dividend. Avidia Bancorp 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
M&T Bank	22.63%	11.86%	1.40%
Avidia Bancorp	11.51%	4.62%	0.63%

Analyst Recommendations

This is a breakdown of current ratings and price targets for M&T Bank and Avidia Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
M&T Bank	1	14	8	0	2.30
Avidia Bancorp	1	1	1	0	2.00

M&T Bank currently has a consensus target price of $247.12, indicating a potential upside of 11.09%. Avidia Bancorp has a consensus target price of $26.00, indicating a potential upside of 16.56%. Given Avidia Bancorp’s higher possible upside, analysts clearly believe Avidia Bancorp is more favorable than M&T Bank.

Volatility & Risk

M&T Bank has a beta of 0.61, indicating that its share price is 39% less volatile than the S&P 500. Comparatively, Avidia Bancorp has a beta of -0.44, indicating that its share price is 144% less volatile than the S&P 500.

Insider & Institutional Ownership

84.7% of M&T Bank shares are owned by institutional investors. 0.4% of M&T Bank shares are owned by company insiders. Comparatively, 3.4% of Avidia 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.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
M&T Bank	$13.23 billion	2.43	$2.85 billion	$19.16	11.61
Avidia Bancorp	$147.61 million	3.02	-$3.29 million	$0.95	23.48

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

Summary

M&T Bank beats Avidia Bancorp on 11 of the 16 factors compared between the two stocks.

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.

About Avidia Bancorp

Avidia Bancorp Inc. is a chartered stock savings bank. It operates full-service banking offices principally in western Middlesex County and eastern Worcester County, in Massachusetts. Avidia Bancorp Inc. is based in HUDSON, Mass.