Norwood Financial (NASDAQ:NWFL) and Silvergate Capital (NYSE:SI) Critical Contrast

Earnings and Valuation

This table compares Silvergate Capital and Norwood Financial”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Silvergate Capital	-$609.47 million	-0.02	-$937.91 million	($29.96)	-0.02
Norwood Financial	$103.66 million	2.36	$16.76 million	$1.59	19.04

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Silvergate Capital	45.10%	8.87%	0.81%
Norwood Financial	10.90%	6.94%	0.57%

Volatility & Risk

Silvergate Capital has a beta of 2.23, indicating that its stock price is 123% more volatile than the S&P 500. Comparatively, Norwood Financial has a beta of 0.61, indicating that its stock price is 39% less volatile than the S&P 500.

Insider & Institutional Ownership

94.4% of Silvergate Capital shares are owned by institutional investors. Comparatively, 28.1% of Norwood Financial shares are owned by institutional investors. 1.7% of Silvergate Capital shares are owned by company insiders. Comparatively, 9.1% of Norwood Financial shares are owned 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.

Dividends

Silvergate Capital pays an annual dividend of $2.94 per share and has a dividend yield of 612.9%. Norwood Financial pays an annual dividend of $1.20 per share and has a dividend yield of 4.0%. Silvergate Capital pays out -9.8% of its earnings in the form of a dividend. Norwood Financial pays out 75.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Silvergate Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Silvergate Capital beats Norwood Financial on 7 of the 13 factors compared between the two stocks.

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.

About Norwood Financial

Norwood Financial Corp. operates as the bank holding company for Wayne Bank that provides various banking products and services. The company accepts a range of deposit products, including interest-bearing and non-interest-bearing transaction accounts, and statement savings and money market accounts, as well as certificate of deposits. It also provides commercial loans comprising lines of credit, revolving credit, term loans, mortgages, secured lending products, and letter of credit facilities; municipal finance lending; construction loans for commercial construction projects and single-family residences; land loans; construction financing; consumer loans; mortgage lending to finance principal residences and second home dwellings; and indirect dealer financing of new and used automobiles, boats, and recreational vehicles. In addition, the company offers investment securities services; personal and business credit services; trust and investment products; and cash management, direct deposit, remote deposit capture, mobile deposit capture, automated clearing house activity, real estate settlement, and Internet and mobile banking services. Further, it engages in the annuity and mutual fund sale, and discount brokerage activities, as well as insurance agency business. The company serves consumers, businesses, nonprofit organizations, and municipalities. It operates branches in Northeastern Pennsylvania; and in Delaware, Sullivan, Ontario, Otsego, and Yates Counties, New York, as well as automated teller machines. Norwood Financial Corp. was founded in 1870 and is headquartered in Honesdale, Pennsylvania.