Financial Contrast: Live Oak Bancshares (NASDAQ:LOB) vs. Signature Bank (NASDAQ:SBNY)

Live Oak Bancshares (NASDAQ:LOB) and Signature Bank (NASDAQ:SBNY) are both small-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, dividends, analyst recommendations, institutional ownership, earnings, risk and profitability.

Insider & Institutional Ownership

64.0% of Live Oak Bancshares shares are held by institutional investors. Comparatively, 11.1% of Signature Bank shares are held by institutional investors. 23.4% of Live Oak Bancshares shares are held by company insiders. Comparatively, 1.5% of Signature Bank 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.

Volatility and Risk

Live Oak Bancshares has a beta of 1.81, suggesting that its stock price is 81% more volatile than the S&P 500. Comparatively, Signature Bank has a beta of 11.6, suggesting that its stock price is 1,060% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Live Oak Bancshares and Signature Bank, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Live Oak Bancshares	0	2	2	0	2.50
Signature Bank	0	0	0	0	0.00

Live Oak Bancshares currently has a consensus target price of $42.50, indicating a potential upside of 28.93%. Given Live Oak Bancshares’ stronger consensus rating and higher probable upside, equities analysts clearly believe Live Oak Bancshares is more favorable than Signature Bank.

Profitability

This table compares Live Oak Bancshares and Signature Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Live Oak Bancshares	7.10%	6.88%	0.55%
Signature Bank	N/A	N/A	N/A

Earnings & Valuation

This table compares Live Oak Bancshares and Signature Bank”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Live Oak Bancshares	$533.05 million	2.83	$77.47 million	$1.49	22.12
Signature Bank	$2.70 billion	0.02	$1.34 billion	$10.22	0.06

Signature Bank has higher revenue and earnings than Live Oak Bancshares. Signature Bank is trading at a lower price-to-earnings ratio than Live Oak Bancshares, indicating that it is currently the more affordable of the two stocks.

Dividends

Live Oak Bancshares pays an annual dividend of $0.12 per share and has a dividend yield of 0.4%. Signature Bank pays an annual dividend of $0.70 per share and has a dividend yield of 107.7%. Live Oak Bancshares pays out 8.1% of its earnings in the form of a dividend. Signature Bank pays out 6.8% 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. Signature Bank is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Live Oak Bancshares beats Signature Bank on 10 of the 16 factors compared between the two stocks.

About Live Oak Bancshares

Live Oak Bancshares, Inc. operates as the bank holding company for Live Oak Banking Company that provides various banking products and services in the United States. It operates through two segments, Banking and Fintech. The company accepts various deposit products, including noninterest-bearing demand, as well as interest-bearing checking, money market, savings, and time deposits. It also offers commercial and industrial loans; construction and development loans; owner occupied and non-owner occupied collateral commercial real estate loans; and commercial land loans. In addition, the company provides settlement, accounting, and securitization services for government guaranteed loans; financing for renewable energy application industry; wealth and investment management services to high-net-worth individuals and families; and investment advisory services to a series of funds focused on providing venture capital to new and emerging financial technology companies. Live Oak Bancshares, Inc. was incorporated in 2008 and is headquartered in Wilmington, North Carolina.

About Signature Bank

As of March 12, 2023, Signature Bank went out of business. Previously, the company provided digital assets banking services and comprised of certain loan portfolios. The company was incorporated in 2000 and is based in New York, New York. Signature Bank now trades on OTCPK.