Orange County Bancorp (NASDAQ:OBT) and HomeStreet (NASDAQ:HMST) Critical Analysis

Orange County Bancorp (NASDAQ:OBT) and HomeStreet (NASDAQ:HMST) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their risk, dividends, profitability, valuation, institutional ownership, analyst recommendations and earnings.

Valuation & Earnings

This table compares Orange County Bancorp and HomeStreet”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Orange County Bancorp	$106.12 million	2.80	$29.48 million	$2.56	10.24
HomeStreet	$441.66 million	0.44	-$27.51 million	($1.30)	-8.01

Orange County Bancorp has higher earnings, but lower revenue than HomeStreet. HomeStreet is trading at a lower price-to-earnings ratio than Orange County Bancorp, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Orange County Bancorp and HomeStreet’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Orange County Bancorp	20.31%	16.37%	1.16%
HomeStreet	-5.44%	-3.40%	-0.19%

Insider & Institutional Ownership

42.5% of Orange County Bancorp shares are owned by institutional investors. Comparatively, 74.7% of HomeStreet shares are owned by institutional investors. 10.5% of Orange County Bancorp shares are owned by insiders. Comparatively, 4.6% of HomeStreet shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Volatility and Risk

Orange County Bancorp has a beta of 0.43, meaning that its stock price is 57% less volatile than the S&P 500. Comparatively, HomeStreet has a beta of 1.48, meaning that its stock price is 48% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings for Orange County Bancorp and HomeStreet, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Orange County Bancorp	0	0	1	0	3.00
HomeStreet	0	2	1	0	2.33

Orange County Bancorp currently has a consensus target price of $35.50, suggesting a potential upside of 35.39%. HomeStreet has a consensus target price of $14.33, suggesting a potential upside of 37.69%. Given HomeStreet’s higher probable upside, analysts clearly believe HomeStreet is more favorable than Orange County Bancorp.

Summary

Orange County Bancorp beats HomeStreet on 9 of the 13 factors compared between the two stocks.

About Orange County Bancorp

Orange County Bancorp, Inc., through its subsidiaries, provides commercial and consumer banking products and services, and trust and wealth management services to small businesses, middle-market enterprises, local municipal governments, and individuals. It accepts various deposits, including interest-bearing and noninterest-bearing demand accounts, money market deposit accounts, savings accounts, and certificates of deposit. The company also offers commercial real estate loans, commercial and industrial loans, commercial real estate construction loans, residential real estate loans, home equity loans, and consumer loans. In addition, it provides traditional trust and administration, asset management, financial planning, and wealth management services. The company operates full-service branches and loan production office in Orange, Westchester, Rockland, and Bronx counties in New York. Orange County Bancorp, Inc. was founded in 1892 and is headquartered in Middletown, New York.

About HomeStreet

HomeStreet, Inc. operates as the bank holding company for HomeStreet Bank that provides commercial, mortgage, and consumer/retail banking services in the Western United States. The company offers personal and business checking, savings, interest-bearing negotiable order of withdrawal, and money market accounts, as well as certificates of deposit; credit cards; insurance; and treasury management services. Its loan products include commercial real estate (CRE), multifamily, construction and land development, owner occupied CRE and commercial business loans; and single family, home equity, and other loans. In addition, the company offers online, mobile, and telephone banking. It serves small and medium sized businesses, real estate investors, professional firms, and individuals. The company operates through branches and ATMs. The company was formerly known as Continental Mortgage and Loan Company. HomeStreet, Inc. was incorporated in 1921 and is headquartered in Seattle, Washington.