OptimumBank (NASDAQ:OPHC – Get Free Report) and Waterstone Financial (NASDAQ:WSBF – Get Free Report) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, analyst recommendations, valuation, risk and dividends.
Profitability
This table compares OptimumBank and Waterstone Financial’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| OptimumBank | 19.62% | 14.10% | 1.31% |
| Waterstone Financial | 14.57% | 8.64% | 1.33% |
Valuation and Earnings
This table compares OptimumBank and Waterstone Financial”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| OptimumBank | $58.79 million | 1.93 | $6.28 million | $0.87 | 10.32 |
| Waterstone Financial | $201.29 million | 1.92 | $26.40 million | $1.72 | 12.51 |
Waterstone Financial has higher revenue and earnings than OptimumBank. OptimumBank is trading at a lower price-to-earnings ratio than Waterstone Financial, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
OptimumBank has a beta of 0.28, suggesting that its stock price is 72% less volatile than the S&P 500. Comparatively, Waterstone Financial has a beta of 0.71, suggesting that its stock price is 29% less volatile than the S&P 500.
Analyst Recommendations
This is a breakdown of recent ratings and target prices for OptimumBank and Waterstone Financial, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| OptimumBank | 0 | 0 | 3 | 1 | 3.25 |
| Waterstone Financial | 0 | 0 | 1 | 0 | 3.00 |
OptimumBank presently has a consensus price target of $6.67, suggesting a potential downside of 25.76%. Given OptimumBank’s stronger consensus rating and higher probable upside, research analysts clearly believe OptimumBank is more favorable than Waterstone Financial.
Institutional & Insider Ownership
7.4% of OptimumBank shares are held by institutional investors. Comparatively, 62.7% of Waterstone Financial shares are held by institutional investors. 18.7% of OptimumBank shares are held by insiders. Comparatively, 6.0% of Waterstone Financial 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.
Summary
OptimumBank beats Waterstone Financial on 8 of the 15 factors compared between the two stocks.
About OptimumBank
OptimumBank Holdings, Inc. operates as the bank holding company for OptimumBank that provides various consumer and commercial banking services to individuals and businesses. It accepts demand interest-bearing and noninterest-bearing, savings, money market, and NOW accounts, as well as time deposits, wire transfers, ACH services, and certificates of deposit. The company also offers residential and commercial real estate, multi-family real estate, land and construction loans; commercial loans are generally used for working capital purposes or for acquiring equipment, inventory, and furniture; and consumer loans for various purposes, including purchases of automobiles, recreational vehicles, boats, home improvements, lines of credit, personal, and deposit account collateralized loans. In addition, it provides Visa debit and ATM cards; cash management, notary, and night depository services; and direct deposits, money orders, cashier's checks, domestic collections, and banking by mail, as well as internet banking services. The company was founded in 2000 and is based in Fort Lauderdale, Florida.
About Waterstone Financial
Waterstone Financial, Inc. operates as a bank holding company for WaterStone Bank SSB that provides various financial services to customers in southeastern Wisconsin, the United States. It operates in two segments, Community Banking and Mortgage Banking. The Community Banking segment offers consumer and business banking products and services, such as deposit and transactional solutions, including checking accounts, online banking and bill pay services, money transfer services, as well as credit, debit, and pre-paid cards; investable funds solutions comprising savings, money market deposits, individual retirement accounts, and certificates of deposit; residential mortgages, home equity loans and lines of credit, personal and installment loans, real estate financing, business loans, and business lines of credit; and fixed and variable annuities, insurance products, and trust and investment management accounts. It also provides transaction deposits, interest bearing transaction accounts, demand deposits, non-interest-bearing demand accounts, and time deposits; secured and unsecured lines; commercial real estate construction loans; term loans for working capital, inventory, and general corporate use; and personal term loans and investment services. The Mortgage Banking segment offers residential mortgage loans for the purpose of sale in the secondary market. It also invests in a portfolio of securities include mortgage-backed securities, government-sponsored and private-label enterprise bonds, collateralized mortgage and municipal obligations, and other debt securities. The company was formerly known as Wauwatosa Holdings, Inc. and changed its name to Waterstone Financial, Inc. in August 2008. The company was founded in 1921 and is based in Wauwatosa, Wisconsin.
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