Reviewing Prime Meridian (OTCMKTS:PMHG) & Chesapeake Financial Shares (OTCMKTS:CPKF)

Risk and Volatility

Chesapeake Financial Shares has a beta of 0.27, suggesting that its share price is 73% less volatile than the S&P 500. Comparatively, Prime Meridian has a beta of 0.17, suggesting that its share price is 83% less volatile than the S&P 500.

Institutional and Insider Ownership

3.7% of Chesapeake Financial Shares shares are owned by institutional investors. Comparatively, 11.8% of Prime Meridian shares are owned by institutional investors. 39.5% of Chesapeake Financial Shares shares are owned by company insiders. Comparatively, 25.9% of Prime Meridian shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Chesapeake Financial Shares and Prime Meridian”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chesapeake Financial Shares	$99.39 million	1.14	$11.43 million	$1.40	17.32
Prime Meridian	$50.36 million	3.60	$8.49 million	$2.48	21.64

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

Dividends

Chesapeake Financial Shares pays an annual dividend of $0.68 per share and has a dividend yield of 2.8%. Prime Meridian pays an annual dividend of $1.00 per share and has a dividend yield of 1.9%. Chesapeake Financial Shares pays out 48.6% of its earnings in the form of a dividend. Prime Meridian pays out 40.3% 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.

Profitability

This table compares Chesapeake Financial Shares and Prime Meridian’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Chesapeake Financial Shares	6.72%	11.80%	0.87%
Prime Meridian	15.49%	9.27%	0.87%

About Chesapeake Financial Shares

Chesapeake Financial Shares, Inc. operates as the bank holding company for Chesapeake Bank that provides various banking products and services for individuals and businesses in the United States. The company accepts interest and noninterest checking, savings, and money market accounts; and variable-rate and fixed-term money market accounts, as well as certificates of deposit. It also offers mortgage, and single-family residential and residential construction loans; commercial loans, which include owner-occupied commercial development, retail, builders/contractors, medical, service and professional, hospitality, nonprofits, marine industry, and agricultural and seafood loans; and consumer and other loans. In addition, the company provides merchant processing, accounts receivable financing, wealth management and trust, and mortgage banking services, as well as cash management services. The company was founded in 1900 and is based in Kilmarnock, Virginia.

About Prime Meridian

Prime Meridian Holding Company operates as the bank holding company for Prime Meridian Bank that provides various consumer and commercial banking services to individuals and businesses. The company accepts various deposits, such as checking, money market, savings, term certificate of deposit, demand interest-bearing and noninterest-bearing, health savings, NOW, and escrow accounts, as well as retirement savings plans and time deposits. Its loan products include commercial real estate, residential real estate and home equity, small business administration, construction, equipment, and commercial loans; and consumer and other loans comprising financing of automobiles, boats, and recreational vehicles, as well as issues standby letters and business lines of credit. The company also offers debit and credit cards; mobile banking, remote and mobile deposit, Apple Pay, bank-to-bank transfer, and online banking services; and safe deposit, wire transfer, foreign exchange, direct deposits, notary, night depository, official checks, domestic collections, bank drafts, automated teller services, drive-in tellers, merchant card, and banking by mail services, as well as invests in securities. Prime Meridian Holding Company was founded in 2008 and is headquartered in Tallahassee, Florida.