Comparing HomeStreet (HMST) and Sussex Bancorp (SBBX)

HomeStreet (NASDAQ: HMST) and Sussex Bancorp (NASDAQ:SBBX) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, risk, valuation, analyst recommendations, profitability, institutional ownership and earnings.

Valuation & Earnings

This table compares HomeStreet and Sussex Bancorp’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
HomeStreet $568.69 million 1.38 $58.15 million $1.34 21.75
Sussex Bancorp $36.99 million 4.35 $5.52 million $1.33 20.04

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

Analyst Ratings

This is a breakdown of current recommendations and price targets for HomeStreet and Sussex Bancorp, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
HomeStreet 0 3 1 0 2.25
Sussex Bancorp 0 0 1 0 3.00

HomeStreet presently has a consensus target price of $29.08, indicating a potential downside of 0.23%. Sussex Bancorp has a consensus target price of $32.50, indicating a potential upside of 21.95%. Given Sussex Bancorp’s stronger consensus rating and higher possible upside, analysts plainly believe Sussex Bancorp is more favorable than HomeStreet.

Dividends

Sussex Bancorp pays an annual dividend of $0.24 per share and has a dividend yield of 0.9%. HomeStreet does not pay a dividend. Sussex Bancorp pays out 18.0% of its earnings in the form of a dividend.

Volatility & Risk

HomeStreet has a beta of 0.23, suggesting that its share price is 77% less volatile than the S&P 500. Comparatively, Sussex Bancorp has a beta of 0.54, suggesting that its share price is 46% less volatile than the S&P 500.

Profitability

This table compares HomeStreet and Sussex Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
HomeStreet 6.68% 6.08% 0.61%
Sussex Bancorp 15.97% 9.19% 0.79%

Insider and Institutional Ownership

85.3% of HomeStreet shares are held by institutional investors. Comparatively, 54.0% of Sussex Bancorp shares are held by institutional investors. 1.6% of HomeStreet shares are held by insiders. Comparatively, 17.6% of Sussex Bancorp shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Sussex Bancorp beats HomeStreet on 9 of the 15 factors compared between the two stocks.

HomeStreet Company Profile

HomeStreet, Inc. is a financial services company serving customers primarily in the western United States, including Hawaii. The Company is principally engaged in real estate lending, including mortgage banking activities, and commercial and consumer banking. The Company’s operating segments include Commercial and Consumer Banking, and Mortgage Banking. It provides financial products and services to its commercial and consumer customers through retail deposit branches and commercial lending centers, automated teller machines (ATMs), and online, mobile and telephone banking. The Company originates single family residential mortgage loans for sale in the secondary markets. Its mortgage loans are sold to or securitized by Fannie Mae, The Federal Home Loan Mortgage Corporation (Freddie Mac) or The Government National Mortgage Association (Ginnie Mae), while it retains the right to service these loans. It also provides insurance products and services for consumers and businesses.

Sussex Bancorp Company Profile

Sussex Bancorp is a bank holding company for Sussex Bank (the Bank). The Company’s primary business is the ownership and supervision of the Bank. The Company has two business segments: banking and financial services, and insurance services. The Company, through the Bank, conducts a traditional commercial banking business, and offer services, including personal and business checking accounts and time deposits, money market accounts and savings accounts. The Company, through the Bank’s subsidiary, Tri-State, operates a full service general insurance agency, offering both commercial and personal lines of insurance. The Company’s service area primarily consists of Sussex, Morris and Bergen Counties in New Jersey, and Orange and Queens Counties, New York. The Company’s loan portfolio includes commercial and industrial consumer loans, construction loans, commercial real estate loans, residential real estate loans, and consumer and other loans.

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