Contrasting Silvergate Capital (NYSE:SI) & United Bancorporation of Alabama (OTCMKTS:UBAB)

United Bancorporation of Alabama (OTCMKTS:UBAB) and Silvergate Capital (NYSE:SI) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, valuation, institutional ownership, earnings, profitability, risk and analyst recommendations.

Risk & Volatility

United Bancorporation of Alabama has a beta of 0.43, indicating that its stock price is 57% less volatile than the S&P 500. Comparatively, Silvergate Capital has a beta of 2.23, indicating that its stock price is 123% more volatile than the S&P 500.

Insider & Institutional Ownership

5.5% of United Bancorporation of Alabama shares are held by institutional investors. Comparatively, 94.4% of Silvergate Capital shares are held by institutional investors. 1.7% of Silvergate Capital shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares United Bancorporation of Alabama and Silvergate Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
United Bancorporation of Alabama	34.65%	27.14%	2.26%
Silvergate Capital	45.10%	8.87%	0.81%

Dividends

United Bancorporation of Alabama pays an annual dividend of $1.00 per share and has a dividend yield of 2.0%. Silvergate Capital pays an annual dividend of $2.94 per share and has a dividend yield of 235.4%. United Bancorporation of Alabama pays out 11.5% of its earnings in the form of a dividend. Silvergate Capital pays out -9.8% 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. Silvergate Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of current ratings for United Bancorporation of Alabama and Silvergate Capital, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
United Bancorporation of Alabama	0	0	0	0	N/A
Silvergate Capital	0	0	0	0	N/A

Valuation and Earnings

This table compares United Bancorporation of Alabama and Silvergate Capital’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
United Bancorporation of Alabama	$87.26 million	2.00	$31.54 million	$8.71	5.64
Silvergate Capital	-$609.47 million	-0.06	-$937.91 million	($29.96)	-0.04

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

Summary

United Bancorporation of Alabama beats Silvergate Capital on 7 of the 13 factors compared between the two stocks.

About United Bancorporation of Alabama

United Bancorporation of Alabama, Inc. operates as the bank holding company for United Bank that provides banking services. The company offers checking and savings accounts, certificates of deposit, individual retirement accounts, small business programs, business solutions, merchant services, and cash management services. It also provides various lending services, such as personal loans, business loans, lines of credit, and equipment loans; real estate loans for the agricultural community and working lines of credit; and overdraft services. In addition, the company offers debit cards, prepaid cards, Visa credit cards, gift cards, and safe deposit boxes. Further, it provides check cashing, convenience, remote deposit, mobile check deposit, personal storage compartments, Web payment options, insurance products, investment and brokerage, and online and mobile banking services. United Bancorporation of Alabama, Inc. was founded in 1904 and is based in Atmore, Alabama.

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.