Guaranty Bancshares (NASDAQ:GNTY – Get Free Report) and Meridian (NASDAQ:MRBK – Get Free Report) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, risk, earnings, profitability, analyst recommendations, dividends and valuation.
Earnings and Valuation
This table compares Guaranty Bancshares and Meridian”s top-line revenue, earnings per share and valuation.
Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
Guaranty Bancshares | $183.90 million | 2.61 | $30.04 million | $2.75 | 15.29 |
Meridian | $168.55 million | 1.10 | $13.24 million | $1.01 | 16.30 |
Guaranty Bancshares has higher revenue and earnings than Meridian. Guaranty Bancshares is trading at a lower price-to-earnings ratio than Meridian, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
Guaranty Bancshares | 0 | 2 | 1 | 0 | 2.33 |
Meridian | 0 | 1 | 1 | 0 | 2.50 |
Guaranty Bancshares presently has a consensus target price of $37.33, suggesting a potential downside of 11.23%. Meridian has a consensus target price of $16.00, suggesting a potential downside of 2.79%. Given Meridian’s stronger consensus rating and higher probable upside, analysts plainly believe Meridian is more favorable than Guaranty Bancshares.
Dividends
Guaranty Bancshares pays an annual dividend of $0.96 per share and has a dividend yield of 2.3%. Meridian pays an annual dividend of $0.50 per share and has a dividend yield of 3.0%. Guaranty Bancshares pays out 34.9% of its earnings in the form of a dividend. Meridian pays out 49.5% 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.
Volatility & Risk
Guaranty Bancshares has a beta of 0.61, suggesting that its share price is 39% less volatile than the S&P 500. Comparatively, Meridian has a beta of 0.81, suggesting that its share price is 19% less volatile than the S&P 500.
Insider & Institutional Ownership
39.4% of Guaranty Bancshares shares are held by institutional investors. Comparatively, 58.6% of Meridian shares are held by institutional investors. 26.4% of Guaranty Bancshares shares are held by insiders. Comparatively, 14.0% of Meridian shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Profitability
This table compares Guaranty Bancshares and Meridian’s net margins, return on equity and return on assets.
Net Margins | Return on Equity | Return on Assets | |
Guaranty Bancshares | 17.15% | 10.13% | 1.02% |
Meridian | 6.00% | 6.99% | 0.49% |
Summary
Guaranty Bancshares beats Meridian on 9 of the 15 factors compared between the two stocks.
About Guaranty Bancshares
Guaranty Bancshares, Inc. operates as the bank holding company for Guaranty Bank & Trust, N.A. that provides a range of commercial and consumer banking products and services for small- and medium-sized businesses, professionals, and individuals. The company offers checking and savings, money market, and business accounts, as well as certificates of deposit; and commercial and industrial, construction and development, 1-4 family residential, commercial real estate, farmland, agricultural, multi-family residential, and consumer loans. It also provides trustee, custodial and escrow, investment management, retirement plan, ATM, night depository, direct deposit, and cashier's check services, as well as online and mobile banking services; debit cards; letters of credit; and treasury management services, including wire transfer, positive pay, remote deposit capture, and automated clearinghouse services. Guaranty Bancshares, Inc. was founded in 1913 and is headquartered in Addison, Texas.
About Meridian
Meridian Corporation operates as the holding company for Meridian Bank that provides commercial banking products and services in Pennsylvania, New Jersey, Delaware, Florida, and Maryland. The company offers various deposit products, such as demand non-interest bearing, demand interest bearing, savings accounts, money market accounts, and time deposits. It also provides commercial and industrial loans comprising business lines of credit, term loans, small business lending, lease financing, shared national credits, and other financing; commercial real estate, and land development and construction loans for residential and commercial projects; and consumer and home equity lending, private banking, merchant, and title and land settlement services. In addition, the company operates and originates mortgage loans for 1-4 family dwellings; and offers real estate holding, investment advisory, and equipment leasing services, as well as financial planning and wealth management services. Meridian Corporation was incorporated in 2004 and is headquartered in Malvern, Pennsylvania.
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