Contrasting Auburn National Bancorporation (NASDAQ:AUBN) & Prime Meridian (OTCMKTS:PMHG)

Prime Meridian (OTCMKTS:PMHG) and Auburn National Bancorporation (NASDAQ:AUBN) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, profitability, earnings, dividends and risk.

Dividends

Prime Meridian pays an annual dividend of $1.00 per share and has a dividend yield of 1.7%. Auburn National Bancorporation pays an annual dividend of $1.08 per share and has a dividend yield of 5.1%. Prime Meridian pays out 40.3% of its earnings in the form of a dividend. Auburn National Bancorporation pays out 51.9% 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.

Earnings & Valuation

This table compares Prime Meridian and Auburn National Bancorporation”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Prime Meridian	$50.36 million	3.92	$8.49 million	$2.48	23.39
Auburn National Bancorporation	$43.89 million	1.67	$7.26 million	$2.08	10.10

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

Risk & Volatility

Prime Meridian has a beta of 0.06, meaning that its share price is 94% less volatile than the S&P 500. Comparatively, Auburn National Bancorporation has a beta of 0.42, meaning that its share price is 58% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and price targets for Prime Meridian and Auburn National Bancorporation, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Prime Meridian	0	0	0	0	0.00
Auburn National Bancorporation	0	1	0	0	2.00

Profitability

This table compares Prime Meridian and Auburn National Bancorporation’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Prime Meridian	15.49%	9.13%	0.87%
Auburn National Bancorporation	16.53%	8.27%	0.72%

Institutional & Insider Ownership

11.8% of Prime Meridian shares are held by institutional investors. Comparatively, 39.5% of Auburn National Bancorporation shares are held by institutional investors. 25.9% of Prime Meridian shares are held by company insiders. Comparatively, 25.1% of Auburn National Bancorporation shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Prime Meridian beats Auburn National Bancorporation on 9 of the 14 factors compared between the two stocks.

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.

About Auburn National Bancorporation

Auburn National Bancorporation, Inc. operates as the bank holding company for AuburnBank that provides various banking products and services in East Alabama. The company offers checking, savings, and transaction deposit accounts, as well as certificates of deposit. It also provides commercial, financial, agricultural, real estate construction, and consumer loan products; and other financial services. In addition, the company offers automated teller services; debit cards; online banking, bill payment, and other electronic banking services; and safe deposit boxes. Auburn National Bancorporation, Inc. was founded in 1907 and is headquartered in Auburn, Alabama.