ALT5 Sigma (NASDAQ:ALTS) vs. Alerus Financial (NASDAQ:ALRS) Critical Analysis

ALT5 Sigma (NASDAQ:ALTS) and Alerus Financial (NASDAQ:ALRS) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, valuation, dividends, risk, institutional ownership, analyst recommendations and profitability.

Profitability

This table compares ALT5 Sigma and Alerus Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ALT5 Sigma	-74.89%	-179.27%	-16.28%
Alerus Financial	11.06%	10.21%	0.98%

Dividends

ALT5 Sigma pays an annual dividend of $1.22 per share and has a dividend yield of 56.2%. Alerus Financial pays an annual dividend of $0.84 per share and has a dividend yield of 3.9%. Alerus Financial pays out 49.7% of its earnings in the form of a dividend. Alerus Financial has increased its dividend for 25 consecutive years.

Analyst Ratings

This is a summary of recent ratings and target prices for ALT5 Sigma and Alerus Financial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ALT5 Sigma	1	0	0	0	1.00
Alerus Financial	0	4	1	1	2.50

Alerus Financial has a consensus price target of $25.63, indicating a potential upside of 18.14%. Given Alerus Financial’s stronger consensus rating and higher probable upside, analysts clearly believe Alerus Financial is more favorable than ALT5 Sigma.

Earnings & Valuation

This table compares ALT5 Sigma and Alerus Financial”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ALT5 Sigma	$22.26 million	12.18	-$6.24 million	N/A	N/A
Alerus Financial	$336.51 million	1.64	$17.78 million	$1.69	12.83

Alerus Financial has higher revenue and earnings than ALT5 Sigma.

Institutional & Insider Ownership

6.3% of ALT5 Sigma shares are held by institutional investors. Comparatively, 51.3% of Alerus Financial shares are held by institutional investors. 0.7% of ALT5 Sigma shares are held by company insiders. Comparatively, 4.2% of Alerus Financial shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Volatility & Risk

ALT5 Sigma has a beta of 1.65, suggesting that its stock price is 65% more volatile than the S&P 500. Comparatively, Alerus Financial has a beta of 0.7, suggesting that its stock price is 30% less volatile than the S&P 500.

Summary

Alerus Financial beats ALT5 Sigma on 12 of the 16 factors compared between the two stocks.

About ALT5 Sigma

ALT5 Sigma Corp. is a clinical-stage biopharmaceutical company, which engages in identifying, acquiring, licensing, developing, partnering, and commercializing novel, non-opioid, and non-addictive therapies to address the large unmet medical need for the treatment of pain and addiction. It operates under the Biotechnology and Recycling segments. The Biotechnology segment focuses on finding treatments for conditions that cause severe pain and bringing to market drugs with non-addictive pain-relieving properties. The Recycling segment is involved in a turnkey appliance recycling program. The company was founded by Edward R. Cameron in 1976 and is headquartered in Las Vegas, NV.

About Alerus Financial

Alerus Financial Corporation operates as the bank holding company for Alerus Financial, National Association that engages in the provision of various financial services to businesses and consumers. The company operates in four segments: Banking, Mortgage, Retirement and Benefit Services, and Wealth Management. It offers various deposit products, including demand deposits, interest-bearing transaction accounts, money market accounts, time and savings deposits, checking accounts, and certificates of deposit; and treasury management products, including electronic receivables management, remote deposit capture, cash vault services, merchant services, and other cash management services. The company also provides commercial loans, business term loans, lines of credit, and commercial real estate loans, as well as construction and land development loans; consumer lending products, including residential first mortgage loans; installment loans and lines of credit; and second mortgage loans. In addition, it offers retirement plan administration and investment advisory services, employee stock ownership plan, fiduciary services, payroll, health savings accounts, and other benefit services, as well as individual retirement accounts; and financial planning, investment management, personal and corporate trust, estate administration, and custody services. Further, the company provides debit and credit cards, online banking, mobile banking/wallet, payment, private banking, payroll accounts, flex spending accounts, administration, and government health insurance program services. It offers banking services in North Dakota, Minnesota, and Arizona; and retirement and benefit plans through offices located in Michigan, Minnesota, and Colorado. The company was formerly known as First National Bank North Dakota and changed its name to Alerus Financial Corporation in 2000. Alerus Financial Corporation was founded in 1879 and is headquartered in Grand Forks, North Dakota.