Live Oak Bancshares (NASDAQ:LOB) and Signature Bank (NASDAQ:SBNY) Critical Review

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

Earnings & Valuation

This table compares Live Oak Bancshares and Signature Bank”s gross 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	2.94	$77.47 million	$1.49	23.01
Signature Bank	$2.70 billion	0.02	$1.34 billion	N/A	N/A

Signature Bank has higher revenue and earnings than Live Oak Bancshares.

Risk & Volatility

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

Insider and 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 insiders. Comparatively, 1.5% of Signature Bank shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

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

Analyst Ratings

This is a summary of recent recommendations and price targets for Live Oak Bancshares and Signature Bank, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Live Oak Bancshares	0	2	3	0	2.60
Signature Bank	0	0	0	0	0.00

Live Oak Bancshares presently has a consensus price target of $43.20, indicating a potential upside of 25.98%. Given Live Oak Bancshares’ stronger consensus rating and higher possible upside, equities analysts clearly believe Live Oak Bancshares is more favorable than Signature Bank.

Dividends

Live Oak Bancshares pays an annual dividend of $0.12 per share and has a dividend yield of 0.3%. 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.

Summary

Live Oak Bancshares beats Signature Bank on 9 of the 14 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.