Critical Analysis: OptimumBank (NASDAQ:OPHC) vs. NewtekOne (NASDAQ:NEWT)

OptimumBank (NASDAQ:OPHC) and NewtekOne (NASDAQ:NEWT) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, risk, profitability, institutional ownership, earnings, dividends and analyst recommendations.

Volatility & Risk

OptimumBank has a beta of 0.37, suggesting that its stock price is 63% less volatile than the S&P 500. Comparatively, NewtekOne has a beta of 1.31, suggesting that its stock price is 31% more volatile than the S&P 500.

Earnings & Valuation

This table compares OptimumBank and NewtekOne”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
OptimumBank	$39.31 million	1.27	$6.28 million	$1.32	3.22
NewtekOne	$220.51 million	1.50	$47.33 million	$1.95	6.46

NewtekOne has higher revenue and earnings than OptimumBank. OptimumBank is trading at a lower price-to-earnings ratio than NewtekOne, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for OptimumBank and NewtekOne, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
OptimumBank	0	1	0	0	2.00
NewtekOne	0	3	0	0	2.00

OptimumBank currently has a consensus target price of $5.25, indicating a potential upside of 23.53%. NewtekOne has a consensus target price of $14.67, indicating a potential upside of 16.40%. Given OptimumBank’s higher possible upside, research analysts plainly believe OptimumBank is more favorable than NewtekOne.

Insider and Institutional Ownership

7.4% of OptimumBank shares are held by institutional investors. Comparatively, 38.3% of NewtekOne shares are held by institutional investors. 13.9% of OptimumBank shares are held by company insiders. Comparatively, 6.5% of NewtekOne shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares OptimumBank and NewtekOne’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
OptimumBank	19.62%	14.10%	1.31%
NewtekOne	14.92%	18.73%	2.95%

Summary

NewtekOne beats OptimumBank on 9 of the 12 factors compared between the two stocks.

About OptimumBank

OptimumBank Holdings, Inc. operates as the bank holding company for OptimumBank that provides various consumer and commercial banking services to individuals and businesses. It accepts demand interest-bearing and noninterest-bearing, savings, money market, and NOW accounts, as well as time deposits, wire transfers, ACH services, and certificates of deposit. The company also offers residential and commercial real estate, multi-family real estate, land and construction loans; commercial loans are generally used for working capital purposes or for acquiring equipment, inventory, and furniture; and consumer loans for various purposes, including purchases of automobiles, recreational vehicles, boats, home improvements, lines of credit, personal, and deposit account collateralized loans. In addition, it provides Visa debit and ATM cards; cash management, notary, and night depository services; and direct deposits, money orders, cashier's checks, domestic collections, and banking by mail, as well as internet banking services. The company was founded in 2000 and is based in Fort Lauderdale, Florida.

About NewtekOne

NewtekOne, Inc. operates as the bank holding company for Newtek Bank, National Association that engages in the provision of various business and financial solutions under the Newtek brand name to the small- and medium-sized business market. The company accepts demand, savings, NOW, money market, and time deposits; and provides loans including SBA loans, commercial and industrial loans, and commercial real estate loans. It is also involved in the provision of electronic payment processing services comprising credit and debit card processing services, check approval services, processing equipment, and software, as well as cloud-based Point of Sale systems for a various restaurant, retail, assisted living, taxi cabs, parks, and golf course businesses. In addition, it offers wholesale brokerage insurance agency services; and payroll management, and related payment and tax reporting services to independent business owners. Further, the company provides website hosting, dedicated server hosting, cloud hosting, web design and development, internet marketing, ecommerce, data storage, backup and disaster recovery, and other related services, including consulting and implementing technology solutions for enterprise and commercial clients as well as SMBs. The company was formerly known as Newtek Business Services Corp. and changed its name to NewtekOne, Inc. in January 2023. NewtekOne, Inc. was founded in 1998 and is headquartered in Boca Raton, Florida.