Investment Comparison: Silvergate Capital vs. HarborOne Bancorp

HarborOne Bancorp (NASDAQ:HONE) and Silvergate Capital (NYSE:SI) are both small-cap finance companies. In this article, we explore which of the two might be a better investment opportunity by comparing various factors including profitability, valuation, institutional ownership, risk profiles, dividends, earnings, and analyst recommendations.

Dividends

HarborOne Bancorp offers an annual dividend of $0.32 per share, which translates to a dividend yield of 2.8%. In contrast, Silvergate Capital provides a much larger annual dividend of $2.94 per share, boasting an impressive dividend yield of 275.0%. However, it's important to note that HarborOne Bancorp distributes 84.2% of its earnings as dividends, raising concerns about future sustainability, while Silvergate Capital has a negative payout ratio of -9.8%. Given these metrics, Silvergate Capital appears to be the stronger dividend option based on yield and payout ratio considerations.

Profitability

When evaluating profitability, we can compare net margins, return on equity, and return on assets for both companies:

	Net Margins	Return on Equity	Return on Assets
HarborOne Bancorp	5.20%	4.59%	0.46%
Silvergate Capital	45.10%	8.87%	0.81%

These figures highlight that Silvergate Capital significantly outperforms HarborOne in all profitability metrics.

Analyst Ratings

Looking at analyst recommendations, we summarize the current ratings for both companies:

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HarborOne Bancorp	0	1	0	0	2.00
Silvergate Capital	0	0	0	0	N/A

HarborOne Bancorp has a consensus price target of $13.00, which suggests a potential upside of 12.65%. Analysts seem to favor HarborOne Bancorp over Silvergate Capital based on this outlook.

Volatility and Risk

Considering volatility, HarborOne Bancorp has a beta of 0.73, indicating that its stock is 27% less volatile than the S&P 500. In contrast, Silvergate Capital has a beta of 2.23, showing that it is 123% more volatile than the S&P 500.

Insider & Institutional Ownership

In terms of ownership, 65.0% of HarborOne Bancorp's shares are owned by institutional investors, while an even larger share of 94.4% for Silvergate Capital is held by institutional investors. Additionally, 4.9% of HarborOne shares are in the hands of company insiders as opposed to just 1.7% for Silvergate Capital. High institutional ownership often indicates that large investors foresee long-term growth for these companies.

Earnings and Valuation

Let’s delve into key earnings and valuation figures:

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HarborOne Bancorp	$286.14 million	1.79	$16.08 million	$0.38	30.37
Silvergate Capital	-$609.47 million	-0.06	-$937.91 million	($29.96)	-0.04

Overall, HarborOne Bancorp showcases higher revenue and profit figures compared to Silvergate Capital. Additionally, Silvergate has a notably lower price-to-earnings ratio, indicating it could be perceived as more affordable at current stock prices.

Company Profiles

About HarborOne Bancorp: HarborOne Bancorp, Inc. acts as the holding company for HarborOne Bank, providing a range of financial services for individuals, families, as well as small and mid-sized businesses. Its services include various deposit accounts, mortgage products, and educational services aimed at financial literacy. HarborOne Bancorp was established in 1917 and is based in Brockton, Massachusetts.

About Silvergate Capital: Silvergate Capital Corporation functions as a bank holding company for Silvergate Bank, targeting both business and individual clients. It offers deposit products and a variety of loan services including mortgages and commercial loans. Additionally, it provides specialized cash management solutions for digital currency-related businesses. Silvergate Capital has been operating since 1988 and is headquartered in La Jolla, California.

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