BofI Holding (NASDAQ: BOFI) and Signature Bank (NASDAQ:SBNY) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, profitability, risk, dividends, earnings and analyst recommendations.

Institutional & Insider Ownership

87.2% of BofI Holding shares are held by institutional investors. Comparatively, 97.9% of Signature Bank shares are held by institutional investors. 6.2% of BofI Holding shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Earnings and Valuation

This table compares BofI Holding and Signature Bank’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
BofI Holding $455.42 million 3.44 $134.74 million $2.13 11.55
Signature Bank $1.36 billion 4.93 $396.32 million $7.14 17.50

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

Analyst Ratings

This is a summary of current ratings and price targets for BofI Holding and Signature Bank, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BofI Holding 0 1 4 0 2.80
Signature Bank 0 4 11 0 2.73

BofI Holding presently has a consensus target price of $33.60, suggesting a potential upside of 36.53%. Signature Bank has a consensus target price of $154.80, suggesting a potential upside of 23.91%. Given BofI Holding’s stronger consensus rating and higher possible upside, equities analysts plainly believe BofI Holding is more favorable than Signature Bank.

Volatility and Risk

BofI Holding has a beta of 0.4, suggesting that its share price is 60% less volatile than the S&P 500. Comparatively, Signature Bank has a beta of 1.01, suggesting that its share price is 1% more volatile than the S&P 500.

Profitability

This table compares BofI Holding and Signature Bank’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
BofI Holding 29.36% 17.00% 1.62%
Signature Bank 26.40% 12.58% 1.18%

Summary

Signature Bank beats BofI Holding on 8 of the 14 factors compared between the two stocks.

About BofI Holding

BofI Holding, Inc. (BofI) is the holding company for BofI Federal Bank (the Bank). The Bank is a diversified financial services company. The Bank provides consumer and business banking products through its branchless, low-cost distribution channels and affinity partners. The Bank has deposit and loan customers, including consumer and business checking, savings and time deposit accounts and financing for single family and multifamily residential properties, small-to-medium size businesses in target sectors, and selected specialty finance receivables. The Bank distributes its deposit products through a range of retail distribution channels, and its deposits consist of demand, savings and time deposits accounts. Its mortgage-backed securities consist primarily of mortgage pass-through securities issued by government-sponsored entities and non-agency collateralized mortgage obligations and pass-through mortgage-backed securities issued by private sponsors.

About Signature Bank

Signature Bank is a full-service commercial bank. The Bank operates over 30 private client offices throughout the New York metropolitan area. Its segments include Commercial Banking and Specialty Finance. It offers a range of business and personal banking products and services. Its specialty finance subsidiary, Signature Financial LLC (Signature Financial), provides equipment finance and leasing services. Signature Securities Group Corporation, a subsidiary of Bank, is a licensed broker-dealer, investment advisor offering investment, brokerage, asset management and insurance products and services. The Commercial Banking segment consists of commercial real estate lending, commercial and industrial lending, and commercial deposit gathering activities. The Specialty Finance segment consists of financing and leasing products, including equipment, transportation, taxi medallion, commercial marine, commercial vehicle, municipal and national franchise financing and/or leasing.

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