Head-To-Head Comparison: State Street (NYSE:STT) vs. Silvergate Capital (NYSE:SI)

Silvergate Capital (NYSE:SI) and State Street (NYSE:STT) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, valuation, dividends, profitability, analyst recommendations, institutional ownership and risk.

Dividends

Silvergate Capital pays an annual dividend of $2.94 per share and has a dividend yield of 700.5%. State Street pays an annual dividend of $2.76 per share and has a dividend yield of 3.7%. Silvergate Capital pays out -9.8% of its earnings in the form of a dividend. State Street pays out 51.7% 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. State Street has increased its dividend for 12 consecutive years. Silvergate Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider and Institutional Ownership

94.4% of Silvergate Capital shares are held by institutional investors. Comparatively, 87.4% of State Street shares are held by institutional investors. 1.7% of Silvergate Capital shares are held by insiders. Comparatively, 0.3% of State Street shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Silvergate Capital and State Street’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%
State Street	9.62%	12.03%	0.87%

Analyst Ratings

This is a summary of current ratings and price targets for Silvergate Capital and State Street, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Silvergate Capital	0	0	0	0	N/A
State Street	2	4	5	0	2.27

State Street has a consensus target price of $84.04, suggesting a potential upside of 12.97%. Given State Street’s higher possible upside, analysts plainly believe State Street is more favorable than Silvergate Capital.

Risk and Volatility

Silvergate Capital has a beta of 2.23, meaning that its stock price is 123% more volatile than the S&P 500. Comparatively, State Street has a beta of 1.52, meaning that its stock price is 52% more volatile than the S&P 500.

Valuation & Earnings

This table compares Silvergate Capital and State Street’s gross revenue, earnings per share (EPS) 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)	-0.01
State Street	$18.37 billion	1.22	$1.94 billion	$5.34	13.93

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

Summary

State Street beats Silvergate Capital on 10 of the 16 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 State Street

State Street Corporation, through its subsidiaries, provides a range of financial products and services to institutional investors worldwide. The company offers investment servicing products and services, including custody, accounting, regulatory reporting, investor, and performance and analytics; middle office products, such as IBOR, transaction management, loans, cash, derivatives and collateral, record keeping, and client reporting and investment analytics; finance leasing; foreign exchange, and brokerage and other trading services; securities finance and enhanced custody products; deposit and short-term investment facilities; investment manager and alternative investment manager operations outsourcing; performance, risk, and compliance analytics; and financial data management to support institutional investors. It also engages in the provision of portfolio management and risk analytics, as well as trading and post-trade settlement services with integrated compliance and managed data. In addition, the company offers investment management strategies and products, such as core and enhanced indexing, multi-asset strategies, active quantitative and fundamental active capabilities, and alternative investment strategies. Further, it provides services and solutions, including environmental, social, and governance investing; defined benefit and defined contribution; and global fiduciary solutions, as well as exchange-traded funds under the SPDR ETF brand. The company provides its products and services to mutual funds, collective investment funds, UCITS, hedge funds and other investment pools, corporate and public retirement plans, insurance companies, foundations, endowments, and investment managers. State Street Corporation was founded in 1792 and is headquartered in Boston, Massachusetts.