Financial Analysis: Silvergate Capital (NYSE:SI) and Ameris Bancorp (NASDAQ:ABCB)

Ameris Bancorp (NASDAQ:ABCB) and Silvergate Capital (NYSE:SI) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, profitability, dividends, risk, valuation, analyst recommendations and institutional ownership.

Valuation & Earnings

This table compares Ameris Bancorp and Silvergate Capital”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ameris Bancorp	$1.67 billion	2.62	$358.68 million	$5.21	12.17
Silvergate Capital	-$609.47 million	-0.02	-$937.91 million	($29.96)	-0.01

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

Analyst Ratings

This is a summary of recent ratings and price targets for Ameris Bancorp and Silvergate Capital, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ameris Bancorp	0	1	5	0	2.83
Silvergate Capital	0	0	0	0	0.00

Ameris Bancorp presently has a consensus target price of $70.50, suggesting a potential upside of 11.22%. Given Ameris Bancorp’s stronger consensus rating and higher possible upside, equities analysts clearly believe Ameris Bancorp is more favorable than Silvergate Capital.

Volatility and Risk

Ameris Bancorp has a beta of 1.06, indicating that its stock price is 6% more 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.

Insider & Institutional Ownership

91.6% of Ameris Bancorp shares are held by institutional investors. Comparatively, 94.4% of Silvergate Capital shares are held by institutional investors. 5.5% of Ameris Bancorp shares are held by company insiders. Comparatively, 1.7% of Silvergate Capital shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Dividends

Ameris Bancorp pays an annual dividend of $0.80 per share and has a dividend yield of 1.3%. Silvergate Capital pays an annual dividend of $2.94 per share and has a dividend yield of 840.6%. Ameris Bancorp pays out 15.4% of its earnings in the form of a dividend. Silvergate Capital pays out -9.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Silvergate Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Ameris Bancorp	21.46%	9.57%	1.32%
Silvergate Capital	45.10%	8.87%	0.81%

Summary

Ameris Bancorp beats Silvergate Capital on 11 of the 16 factors compared between the two stocks.

About Ameris Bancorp

Ameris Bancorp operates as the bank holding company for Ameris Bank that provides range of banking services to retail and commercial customers. It operates through five segments: Banking Division, Retail Mortgage Division, Warehouse Lending Division, SBA Division, and Premium Finance Division. The company offers commercial and retail checking, regular interest-bearing savings, money market, individual retirement, and certificates of deposit accounts. It also provides commercial real estate, residential real estate mortgage, agricultural, and commercial and industrial loans; consumer loans, including motor vehicle, home improvement, and home equity loans, as well as loans secured by savings accounts and personal credit lines. In addition, the company originates, administers, and services commercial insurance premium loans, equipment finance loans, and small business administration loans. It operates full service domestic banking offices, and mortgage and loan production offices. The company was founded in 1971 and is headquartered in Atlanta, Georgia.

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.