Head-To-Head Review: Isabella Bank (OTCMKTS:ISBA) vs. Signature Bank (NASDAQ:SBNY)

Signature Bank (NASDAQ:SBNY) and Isabella Bank (OTCMKTS:ISBA) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their valuation, risk, dividends, analyst recommendations, profitability, institutional ownership and earnings.

Volatility & Risk

Signature Bank has a beta of 11.52, meaning that its stock price is 1,052% more volatile than the S&P 500. Comparatively, Isabella Bank has a beta of 0.12, meaning that its stock price is 88% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Signature Bank and Isabella Bank, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Signature Bank	0	0	0	0	0.00
Isabella Bank	0	1	0	0	2.00

Isabella Bank has a consensus price target of $34.00, suggesting a potential downside of 17.32%. Given Isabella Bank’s stronger consensus rating and higher possible upside, analysts clearly believe Isabella Bank is more favorable than Signature Bank.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Signature Bank	N/A	N/A	N/A
Isabella Bank	13.28%	7.34%	0.73%

Dividends

Signature Bank pays an annual dividend of $0.70 per share and has a dividend yield of 116.7%. Isabella Bank pays an annual dividend of $1.12 per share and has a dividend yield of 2.7%. Signature Bank pays out 6.8% of its earnings in the form of a dividend. Isabella Bank pays out 45.5% 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.

Valuation and Earnings

This table compares Signature Bank and Isabella Bank”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Signature Bank	$2.70 billion	0.01	$1.34 billion	$10.22	0.06
Isabella Bank	$72.85 million	4.15	$13.89 million	$2.46	16.72

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

Institutional & Insider Ownership

11.1% of Signature Bank shares are owned by institutional investors. 1.5% of Signature Bank shares are owned by insiders. Comparatively, 9.7% of Isabella Bank shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

Isabella Bank beats Signature Bank on 8 of the 15 factors compared between the two stocks.

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.

About Isabella Bank

Isabella Bank Corporation operates as the bank holding company for Isabella Bank that provides various banking products and services to businesses, institutions, and individuals and their families. Its deposit products include checking accounts, savings accounts, certificates of deposit, direct deposits, and money market accounts. The company's loan portfolio comprises commercial, agricultural, and residential real estate loans, as well as consumer loans, including secured and unsecured personal loans. It also offers cash management, mobile and internet banking, electronic bill pay, automated teller machines, trust and investment, estate planning, and safe deposit box rental services; and insurance products. The company operated banking offices in Clare, Gratiot, Isabella, Mecosta, Midland, Montcalm, and Saginaw counties. Isabella Bank Corporation was founded in 1903 and is headquartered in Mount Pleasant, Michigan.