Hingham Institution for Savings (NASDAQ: HIFS) and PennyMac Financial Services (NYSE:PFSI) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, profitability, valuation, institutional ownership, earnings, risk and dividends.
Risk and Volatility
Hingham Institution for Savings has a beta of 0.81, indicating that its stock price is 19% less volatile than the S&P 500. Comparatively, PennyMac Financial Services has a beta of 0.56, indicating that its stock price is 44% less volatile than the S&P 500.
This is a breakdown of recent ratings and recommmendations for Hingham Institution for Savings and PennyMac Financial Services, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Hingham Institution for Savings||0||0||0||0||N/A|
|PennyMac Financial Services||0||1||3||0||2.75|
PennyMac Financial Services has a consensus price target of $26.00, indicating a potential upside of 7.66%. Given PennyMac Financial Services’ higher probable upside, analysts clearly believe PennyMac Financial Services is more favorable than Hingham Institution for Savings.
Hingham Institution for Savings pays an annual dividend of $1.36 per share and has a dividend yield of 0.6%. PennyMac Financial Services does not pay a dividend. Hingham Institution for Savings pays out 11.5% of its earnings in the form of a dividend.
Insider and Institutional Ownership
31.5% of Hingham Institution for Savings shares are held by institutional investors. Comparatively, 93.3% of PennyMac Financial Services shares are held by institutional investors. 45.6% of PennyMac Financial Services shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Valuation & Earnings
This table compares Hingham Institution for Savings and PennyMac Financial Services’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Hingham Institution for Savings||$82.47 million||5.40||$25.76 million||$11.83||17.84|
|PennyMac Financial Services||$955.46 million||0.59||$100.76 million||$4.06||5.95|
PennyMac Financial Services has higher revenue and earnings than Hingham Institution for Savings. PennyMac Financial Services is trading at a lower price-to-earnings ratio than Hingham Institution for Savings, indicating that it is currently the more affordable of the two stocks.
This table compares Hingham Institution for Savings and PennyMac Financial Services’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Hingham Institution for Savings||31.23%||N/A||N/A|
|PennyMac Financial Services||10.55%||3.62%||0.91%|
PennyMac Financial Services beats Hingham Institution for Savings on 9 of the 15 factors compared between the two stocks.
Hingham Institution for Savings Company Profile
Hingham Institution for Savings (the Bank) is a Massachusetts-chartered savings bank (the Bank). The Bank is principally engaged in the business of residential and commercial real estate mortgage lending, funded by a retail deposit network and borrowings. The Bank provides a range of financial services to individuals and small businesses through its approximately 10 offices in Boston and southeastern Massachusetts. Its primary deposit products are savings, checking, and term certificate accounts, and its primary lending products are residential and commercial mortgage loans secured by properties in Eastern Massachusetts. The Bank offers personal checking accounts, money market and savings accounts, as well as longer term certificates of deposit for individuals, businesses, non-profits, cities and towns. The Bank’s loan portfolio includes residential real estate, commercial real estate, construction, home equity, commercial and consumer segments.
PennyMac Financial Services Company Profile
PennyMac Financial Services, Inc. (PFSI) is a financial services company. The Company is focused on the production and servicing of the United States residential mortgage loans and the management of investments related to the United States mortgage market. The Company operates through three segments: loan production, loan servicing and investment management. PFSI’s mortgage banking subsidiary, PennyMac Loan Services, LLC (PLS), is a non-bank producer and servicer of mortgage loans in the United States. As of December 31, 2016, PLS serviced loans in all 50 states, the District of Columbia, Guam and the United States Virgin Islands, and originated loans in 49 states and the District of Columbia. PFSI’s investment management subsidiary, PNMAC Capital Management, LLC (PCM), is an investment advisor. PLS is a seller and servicer for the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac).
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