Critical Comparison: HarborOne Bancorp (NASDAQ:HONE) vs. Silvergate Capital (NYSE:SI)

HarborOne Bancorp (NASDAQ:HONE) and Silvergate Capital (NYSE:SI) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, analyst recommendations, risk, dividends, earnings, institutional ownership and profitability.

Profitability

This table compares HarborOne Bancorp and Silvergate Capital’s net margins, return on equity and return on assets.

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

Risk & Volatility

HarborOne Bancorp has a beta of 0.73, indicating that its stock price is 27% less volatile than the S&P 500. Comparatively, Silvergate Capital has a beta of 2.23, indicating that its stock price is 123% more volatile than the S&P 500.

Dividends

HarborOne Bancorp pays an annual dividend of $0.32 per share and has a dividend yield of 2.4%. Silvergate Capital pays an annual dividend of $2.94 per share and has a dividend yield of 367.7%. HarborOne Bancorp pays out 86.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Silvergate Capital pays out -9.8% of its earnings in the form of a dividend. Silvergate Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares HarborOne Bancorp and Silvergate Capital”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HarborOne Bancorp	$160.61 million	3.64	$16.08 million	$0.37	35.38
Silvergate Capital	-$609.47 million	-0.04	-$937.91 million	($29.96)	-0.03

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

Institutional and Insider Ownership

65.0% of HarborOne Bancorp shares are owned by institutional investors. Comparatively, 94.4% of Silvergate Capital shares are owned by institutional investors. 4.9% of HarborOne Bancorp shares are owned by insiders. Comparatively, 1.7% of Silvergate Capital shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations for HarborOne Bancorp and Silvergate Capital, as provided by MarketBeat.

	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 currently has a consensus price target of $14.00, indicating a potential upside of 6.95%. Given HarborOne Bancorp’s higher probable upside, analysts clearly believe HarborOne Bancorp is more favorable than Silvergate Capital.

About HarborOne Bancorp

HarborOne Bancorp, Inc. operates as the holding company for HarborOne Bank that provides financial services to individuals, families, small and mid-size businesses, and municipalities. The company operates in two segments, HarborOne Bank and HarborOne Mortgage. Its primary deposit products include checking, money market, savings, and term certificate of deposit accounts; and primary lending products comprise commercial real estate, commercial, residential mortgages, home equity, and consumer loans. The company also originates, sells, and services residential mortgage loans. In addition, it provides various educational services, such as free digital content, webinars, and recordings for small business and personal financial education under the HarborOne U name. The company operates through a network of full-service branches located in Massachusetts and Rhode Island, as well as commercial lending offices in each of Boston, Massachusetts, and Providence, Rhode Island, as well as administrative offices in Brockton, Massachusetts, as well as ATM locations in Massachusetts. HarborOne Bancorp, Inc. was founded in 1917 and is headquartered in Brockton, Massachusetts.

About Silvergate Capital

Silvergate Capital Corporation operates as a bank holding company for Silvergate Bank that provides banking products and services to business and individual clients in the United States. The company accepts deposit products, including interest and noninterest bearing demand accounts, money market and savings accounts, and certificates of deposit accounts. Its loan products comprise one-to-four family real estate loans, multi-family real estate loans, commercial real estate loans, construction loans, commercial and industrial loans, mortgage warehouse loans, and reverse mortgage loans, as well as consumer loans and other loans secured by personal property. The company also provides cash management services for digital currency-related businesses. Silvergate Capital Corporation was founded in 1988 and is headquartered in La Jolla, California.