Comparing HarborOne Bancorp and Silvergate Capital as Investment Options

HarborOne Bancorp (NASDAQ:HONE) and Silvergate Capital (NYSE:SI) are both classified as small-cap financial firms that attract the attention of investors. This article aims to determine which of these two companies represents the better investment opportunity by evaluating various factors including profitability, valuation, institutional ownership, risk, dividends, earnings, and analyst recommendations.

Dividend Comparison

When it comes to dividends, HarborOne Bancorp offers an annual dividend of $0.32 per share, resulting in a dividend yield of 2.8%. In contrast, Silvergate Capital pays a significantly higher annual dividend of $2.94 per share, which translates to a staggering yield of 275.0%. However, it's worth noting that HarborOne Bancorp has a payout ratio of 84.2%, indicating that a substantial portion of its earnings is distributed as dividends. This high payout ratio raises concerns about its ability to sustain dividend payments in the long run. On the other hand, Silvergate Capital shows a negative payout ratio of -9.8%, suggesting that it is retaining earnings rather than distributing them as dividends. Overall, Silvergate Capital appears to be a more attractive dividend option due to its higher yield and lower payout ratio.

Profitability Metrics

The following table compares key profitability metrics between HarborOne Bancorp and Silvergate Capital:

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

From the metrics presented, it is evident that Silvergate Capital demonstrates considerably stronger profitability compared to HarborOne Bancorp.

Analyst Recommendations

A summary of current ratings and recommendations for both HarborOne Bancorp and Silvergate Capital is as follows:

	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

The current consensus price target for HarborOne Bancorp is $13.00, reflecting a potential upside of 12.65%. This higher upside suggests that analysts favor HarborOne Bancorp over Silvergate Capital at this time.

Volatility and Risk Assessment

In terms of volatility, HarborOne Bancorp has a beta of 0.73, indicating that its stock price is 27% less volatile than the broader S&P 500 index. Conversely, Silvergate Capital carries a beta of 2.23, meaning it is 123% more volatile than the S&P 500, suggesting higher risk associated with investing in Silvergate Capital.

Ownership Breakdown

Institutional investors hold about 65.0% of HarborOne Bancorp shares, while a higher percentage of 94.4% of Silvergate Capital shares are owned by institutional investors. Additionally, insiders hold 4.9% of HarborOne Bancorp shares compared to only 1.7% for Silvergate Capital. Strong institutional ownership may indicate confidence from large investors in the future growth potential of these companies.

Earnings and Valuation Analysis

Below is a comparison of earnings and valuation metrics for both companies:

	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

Analysis shows that HarborOne Bancorp has substantially higher revenue and net income compared to Silvergate Capital, which is currently reporting negative figures. Although Silvergate Capital trades at a lower price-to-earnings ratio than HarborOne Bancorp, this can be attributed to its struggling financial performance.

Company Overviews

About HarborOne Bancorp:

HarborOne Bancorp, Inc. operates as the holding company for HarborOne Bank, offering various financial services to individuals, families, and businesses. The company’s offerings include checking accounts, savings accounts, and loans ranging from commercial real estate to consumer loans. Established in 1917, HarborOne Bancorp is headquartered in Brockton, Massachusetts.

About Silvergate Capital:

Silvergate Capital Corporation serves as a bank holding company providing banking services primarily to businesses and individuals across the U.S. It offers a variety of deposit products and loan services. Additionally, it specializes in cash management services tailored for digital currency-related businesses. Founded in 1988, Silvergate Capital is headquartered in La Jolla, California.

Investment, Finance, Comparison