Critical Survey: Fidelity Southern (LION) & Signature Bank (SBNY)

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

Profitability

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

Net Margins Return on Equity Return on Assets
Fidelity Southern 12.21% 8.68% 0.79%
Signature Bank 34.17% 14.15% 1.31%

Risk and Volatility

Fidelity Southern has a beta of 0.67, suggesting that its stock price is 33% less volatile than the S&P 500. Comparatively, Signature Bank has a beta of 1.36, suggesting that its stock price is 36% more volatile than the S&P 500.

Dividends

Fidelity Southern pays an annual dividend of $0.48 per share and has a dividend yield of 1.7%. Signature Bank pays an annual dividend of $2.24 per share and has a dividend yield of 1.9%. Fidelity Southern pays out 29.8% of its earnings in the form of a dividend. Signature Bank pays out 19.9% 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.

Analyst Recommendations

This is a summary of recent ratings and price targets for Fidelity Southern and Signature Bank, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fidelity Southern 0 0 2 0 3.00
Signature Bank 0 5 9 0 2.64

Fidelity Southern currently has a consensus price target of $28.50, indicating a potential downside of 0.94%. Signature Bank has a consensus price target of $144.00, indicating a potential upside of 22.49%. Given Signature Bank’s higher possible upside, analysts plainly believe Signature Bank is more favorable than Fidelity Southern.

Insider & Institutional Ownership

68.1% of Fidelity Southern shares are owned by institutional investors. Comparatively, 94.6% of Signature Bank shares are owned by institutional investors. 20.2% of Fidelity Southern shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Fidelity Southern and Signature Bank’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Fidelity Southern $320.30 million 2.48 $43.82 million $1.61 17.87
Signature Bank $1.73 billion 3.73 $505.34 million $11.28 10.42

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

Summary

Signature Bank beats Fidelity Southern on 13 of the 16 factors compared between the two stocks.

About Fidelity Southern

Fidelity Southern Corporation operates as the bank holding company for Fidelity Bank that provides financial products and services primarily to individuals and small to medium-sized businesses in the United States. The company accepts noninterest-bearing and interest-bearing demand accounts, including money market accounts and savings deposits; and time deposits. It also offers commercial and industrial loans, commercial real estate loans, small business administration loans, indirect automobile loans, and real estate construction loans, as well as consumer loans, including automobile loans, residential mortgage and home equity loans, and secured and unsecured personal loans. In addition, the company provides Internet banking services comprising online bill pay and mobile deposit, and Internet cash management services; and wealth management services, such as trust administration, investment management, financial and estate planning, and specialized lending and banking. Further, it offers cash management, remote deposit, and international trade services; and merchant services and credit cards. Additionally, the company operates an insurance agency that offers consumer credit related insurance products; and issues trust preferred securities. As of December 31, 2018, it owned 59 and leased 10 retail bank branches; and leased 33 mortgage loan production offices. Fidelity Southern Corporation was founded in 1973 and is headquartered in Atlanta, Georgia.

About Signature Bank

Signature Bank provides various business and personal banking products and services. It accepts various deposit products, including commercial checking accounts, money market accounts, escrow deposit accounts, cash concentration accounts, interest-bearing and non-interest-bearing checking accounts, certificates of deposit, time deposits, and other cash management products. The company also offers loan products comprising commercial and industrial loans; real estate loans, such as loans secured by commercial and residential properties, and construction and land loans; temporary financing for commercial and residential properties; letters of credit; and personal lines of credit and loans to acquire personal assets, as well as asset-based lending, mortgages, home equity loans, and credit card accounts. In addition, it provides investment, brokerage, and asset management products and services; retirement products, such as individual retirement accounts and administrative services for retirement vehicles, which include pension, profit sharing, and 401(k) plans to its clients, as well as business retirement accounts; and a range of financing and leasing products consisting of equipment, transportation, taxi medallion, commercial marine, and municipal and national franchise financing services. Further, the company offers wealth management services to its high net worth personal clients; and a range of individual and group insurance products that comprise health, life, disability, and long-term care insurance products as an agent. Additionally, it purchases, securitizes, and sells guaranteed portions of the U.S. small business administration loans. As of December 31, 2017, the company operated 30 private client offices located in the New York metropolitan area, which included Manhattan, Brooklyn, Westchester, Long Island, Queens, the Bronx, Staten Island, and Connecticut. Signature Bank was incorporated in 2000 and is headquartered in New York, New York.

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