Head-To-Head Comparison: Shore Bancshares (NASDAQ:SHBI) & Pathward Financial (NASDAQ:CASH)

Shore Bancshares (NASDAQ:SHBI) and Pathward Financial (NASDAQ:CASH) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, risk, earnings, institutional ownership, analyst recommendations, profitability and dividends.

Analyst Ratings

This is a summary of current recommendations and price targets for Shore Bancshares and Pathward Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Shore Bancshares	0	1	3	1	3.00
Pathward Financial	0	0	3	0	3.00

Shore Bancshares currently has a consensus target price of $21.33, suggesting a potential upside of 8.95%. Pathward Financial has a consensus target price of $107.50, suggesting a potential upside of 25.23%. Given Pathward Financial’s higher probable upside, analysts plainly believe Pathward Financial is more favorable than Shore Bancshares.

Earnings and Valuation

This table compares Shore Bancshares and Pathward Financial”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Shore Bancshares	$342.72 million	1.91	$59.51 million	$1.88	10.41
Pathward Financial	$851.49 million	2.19	$185.87 million	$8.42	10.19

Pathward Financial has higher revenue and earnings than Shore Bancshares. Pathward Financial is trading at a lower price-to-earnings ratio than Shore Bancshares, indicating that it is currently the more affordable of the two stocks.

Dividends

Shore Bancshares pays an annual dividend of $0.48 per share and has a dividend yield of 2.5%. Pathward Financial pays an annual dividend of $0.20 per share and has a dividend yield of 0.2%. Shore Bancshares pays out 25.5% of its earnings in the form of a dividend. Pathward Financial pays out 2.4% 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.

Risk and Volatility

Shore Bancshares has a beta of 0.83, suggesting that its stock price is 17% less volatile than the S&P 500. Comparatively, Pathward Financial has a beta of 0.64, suggesting that its stock price is 36% less volatile than the S&P 500.

Institutional and Insider Ownership

59.8% of Shore Bancshares shares are held by institutional investors. Comparatively, 92.7% of Pathward Financial shares are held by institutional investors. 8.7% of Shore Bancshares shares are held by insiders. Comparatively, 1.4% of Pathward Financial shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Shore Bancshares and Pathward Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Shore Bancshares	18.20%	11.97%	1.12%
Pathward Financial	22.42%	22.35%	2.60%

Summary

Pathward Financial beats Shore Bancshares on 10 of the 15 factors compared between the two stocks.

About Shore Bancshares

Shore Bancshares, Inc. operates as a bank holding company for the Shore United Bank, N.A. that provides various commercial and consumer banking products and services to individuals, businesses, and other organizations. It offers checking, savings, overnight investment sweep, and money market accounts; and regular and IRA certificates of deposit, as well as CDARS programs and cash management services. The company also provides commercial loans, such as secured and unsecured loans, working capital loans, lines of credit, term loans, accounts receivable financing, real estate acquisition and development loans, construction loans, and letters of credit; residential real estate construction loans; residential mortgage loans; and loans to consumers, including home equity, automobile, installment, home improvement, and personal lines of credit, as well as other consumer financing products. In addition, it offers trust, asset management, and financial planning services; treasury management services, such as merchant card processing, remote deposit capture, and ACH origination, as well as telephone, mobile, and Internet banking services; safe deposit boxes; debit and credit cards; and automatic teller machine services. Shore Bancshares, Inc. was founded in 1876 and is headquartered in Easton, Maryland.

About Pathward Financial

Pathward Financial, Inc. operates as the bank holding company for Pathward, National Association that provides various banking products and services in the United States. The company operates through three segments: Consumer, Commercial, and Corporate Services/Other. It offers demand deposit accounts, savings accounts, and money market savings accounts. The company also provides commercial finance product comprising term lending, asset-based lending, factoring, lease financing, insurance premium finance, government guaranteed lending, and other commercial finance products; consumer credit products; other consumer financing services; tax services, which includes short-term refund advance loans and short-term electronic return originator advance loans; and warehouse financing services. In addition, it issues prepaid cards; and offers payment solutions, such as acceptance, processing, and settlement of credit card and debit card payments. The company was formerly known as Meta Financial Group, Inc. and changed its name to Pathward Financial, Inc. in July 2022. Pathward Financial, Inc. was founded in 1954 and is based in Sioux Falls, South Dakota.