Head to Head Review: Meridian (NASDAQ:MRBK) versus Carver Bancorp (NASDAQ:CARV)

Carver Bancorp (NASDAQ:CARV) and Meridian (NASDAQ:MRBK) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, earnings, dividends, profitability, analyst recommendations, valuation and risk.

Volatility & Risk

Carver Bancorp has a beta of 1.41, indicating that its share price is 41% more volatile than the S&P 500. Comparatively, Meridian has a beta of 0.64, indicating that its share price is 36% less volatile than the S&P 500.

Institutional & Insider Ownership

18.2% of Carver Bancorp shares are owned by institutional investors. Comparatively, 58.6% of Meridian shares are owned by institutional investors. 1.3% of Carver Bancorp shares are owned by company insiders. Comparatively, 14.1% of Meridian shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Carver Bancorp and Meridian”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Carver Bancorp	$22.74 million	0.50	-$13.74 million	($1.36)	-1.32
Meridian	$205.49 million	1.09	$21.84 million	$2.06	9.14

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

Analyst Ratings

This is a summary of current recommendations for Carver Bancorp and Meridian, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Carver Bancorp	1	0	0	0	1.00
Meridian	1	0	3	0	2.50

Meridian has a consensus target price of $22.00, suggesting a potential upside of 16.90%. Given Meridian’s stronger consensus rating and higher possible upside, analysts plainly believe Meridian is more favorable than Carver Bancorp.

Profitability

This table compares Carver Bancorp and Meridian’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Carver Bancorp	-34.89%	-171.55%	-1.82%
Meridian	11.89%	12.29%	0.95%

Summary

Meridian beats Carver Bancorp on 13 of the 14 factors compared between the two stocks.

About Carver Bancorp

Carver Bancorp, Inc. operates as the holding company for Carver Federal Savings Bank that provides consumer and commercial banking services for consumers, businesses, non-profit organizations, and governmental and quasi-governmental agencies primarily in New York. It accepts various deposit products, including demand, savings, and time deposits; passbook and statement accounts, and certificates of deposit; and individual retirement accounts. The company provides lending products, such as one-to-four family residential, multifamily real estate, and commercial real estate lending; and construction, business and small business administration, and consumer and other loans. In addition, it offers other consumer and commercial banking products and services, including debit cards, online account opening and banking, online bill pay, and telephone banking, as well as check cashing, wire transfer, bill payment, reloadable prepaid card, and money order services. Carver Bancorp, Inc. was founded in 1948 and is headquartered in New York, New York.

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.