Meridian (NASDAQ:MRBK – Get Rating) and Southern First Bancshares (NASDAQ:SFST – Get Rating) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, risk, valuation, institutional ownership, earnings, analyst recommendations and profitability.
Analyst Recommendations
This is a breakdown of current ratings and recommmendations for Meridian and Southern First Bancshares, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Meridian | 0 | 0 | 2 | 0 | 3.00 |
| Southern First Bancshares | 0 | 0 | 1 | 0 | 3.00 |
Meridian presently has a consensus target price of $45.00, indicating a potential upside of 41.29%. Southern First Bancshares has a consensus target price of $50.00, indicating a potential upside of 10.23%. Given Meridian’s higher probable upside, equities analysts clearly believe Meridian is more favorable than Southern First Bancshares.
Valuation and Earnings
This table compares Meridian and Southern First Bancshares’ revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Meridian | $159.51 million | 1.22 | $35.58 million | $4.60 | 6.92 |
| Southern First Bancshares | $110.27 million | 3.29 | $46.71 million | $5.12 | 8.86 |
Southern First Bancshares has lower revenue, but higher earnings than Meridian. Meridian is trading at a lower price-to-earnings ratio than Southern First Bancshares, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
57.0% of Meridian shares are owned by institutional investors. Comparatively, 83.9% of Southern First Bancshares shares are owned by institutional investors. 13.4% of Meridian shares are owned by company insiders. Comparatively, 7.3% of Southern First Bancshares shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Profitability
This table compares Meridian and Southern First Bancshares’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Meridian | 20.86% | 17.96% | 1.60% |
| Southern First Bancshares | 36.78% | 14.93% | 1.37% |
Risk & Volatility
Meridian has a beta of 0.44, meaning that its share price is 56% less volatile than the S&P 500. Comparatively, Southern First Bancshares has a beta of 0.88, meaning that its share price is 12% less volatile than the S&P 500.
Summary
Southern First Bancshares beats Meridian on 7 of the 13 factors compared between the two stocks.
About Meridian
(Get Rating)
Meridian Corporation operates as the holding company for Meridian Bank that provides commercial banking products and services in Pennsylvania, New Jersey, Delaware, 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, and shared national credits; 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. It operates through a network of 6 full-service branches, and 19 other offices. The company was founded in 2004 and is headquartered in Malvern, Pennsylvania.
About Southern First Bancshares
(Get Rating)
Southern First Bancshares, Inc. operates as the bank holding company for Southern First Bank that provides various banking products and services to general public in South Carolina, North Carolina, and Georgia. It operates through three segments: Commercial and Retail Banking, Mortgage Banking, and Corporate Operations. The company accepts various deposit products that include checking accounts, commercial checking accounts, and savings accounts, as well as other time deposits, including daily money market accounts and long-term certificates of deposit. Its loan portfolio comprises commercial real estate loans; construction real estate loans; commercial business loans for various lines of businesses, such as the manufacturing, service industry, and professional service areas; consumer real estate and home equity loans; and other consumer loans, including secured and unsecured installment loans and revolving lines of credit. In addition, the company provides other bank services, such as internet banking, cash management, safe deposit boxes, direct deposit, automatic drafts, bill payment, and mobile banking services. It operates through eight retail offices located in Greenville, Charleston, and Columbia; three retail offices located in Raleigh, Greensboro, and Charlotte markets; and one retail office located in Atlanta. The company was incorporated in 1999 and is headquartered in Greenville, South Carolina.
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