Analyzing Alerus Financial (NASDAQ:ALRS) & GBank Financial (NASDAQ:GBFH)

GBank Financial (NASDAQ:GBFH) and Alerus Financial (NASDAQ:ALRS) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, analyst recommendations, dividends, earnings, profitability, valuation and institutional ownership.

Earnings and Valuation

This table compares GBank Financial and Alerus Financial”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GBank Financial	$109.61 million	2.63	$20.93 million	$1.28	15.50
Alerus Financial	$399.92 million	2.07	$17.44 million	$1.06	31.42

GBank Financial has higher earnings, but lower revenue than Alerus Financial. GBank Financial is trading at a lower price-to-earnings ratio than Alerus Financial, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

GBank Financial has a beta of 0.03, suggesting that its share price is 97% less volatile than the S&P 500. Comparatively, Alerus Financial has a beta of 0.67, suggesting that its share price is 33% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for GBank Financial and Alerus Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GBank Financial	1	1	4	0	2.50
Alerus Financial	0	6	1	0	2.14

GBank Financial currently has a consensus price target of $37.33, suggesting a potential upside of 88.17%. Alerus Financial has a consensus price target of $35.50, suggesting a potential upside of 6.57%. Given GBank Financial’s stronger consensus rating and higher possible upside, research analysts clearly believe GBank Financial is more favorable than Alerus Financial.

Profitability

This table compares GBank Financial and Alerus Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GBank Financial	15.44%	14.42%	1.75%
Alerus Financial	6.87%	14.41%	1.55%

Institutional and Insider Ownership

51.2% of Alerus Financial shares are owned by institutional investors. 32.4% of GBank Financial shares are owned by insiders. Comparatively, 4.3% of Alerus Financial shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

GBank Financial beats Alerus Financial on 10 of the 14 factors compared between the two stocks.

About GBank Financial

GBank Financial Holdings Inc. operates as a bank holding company for GBank which provides banking services to commercial and consumer customers principally in Nevada. The company offers business and personal checking and savings accounts. GBank Financial Holdings Inc. is based in Las Vegas, Nevada.

About Alerus Financial

Alerus Financial Corporation operates as the bank holding company for Alerus Financial, National Association that engages in the provision of various financial services to businesses and consumers. The company operates in four segments: Banking, Mortgage, Retirement and Benefit Services, and Wealth Management. It offers various deposit products, including demand deposits, interest-bearing transaction accounts, money market accounts, time and savings deposits, checking accounts, and certificates of deposit; and treasury management products, including electronic receivables management, remote deposit capture, cash vault services, merchant services, and other cash management services. The company also provides commercial loans, business term loans, lines of credit, and commercial real estate loans, as well as construction and land development loans; consumer lending products, including residential first mortgage loans; installment loans and lines of credit; and second mortgage loans. In addition, it offers retirement plan administration and investment advisory services, employee stock ownership plan, fiduciary services, payroll, health savings accounts, and other benefit services, as well as individual retirement accounts; and financial planning, investment management, personal and corporate trust, estate administration, and custody services. Further, the company provides debit and credit cards, online banking, mobile banking/wallet, payment, private banking, payroll accounts, flex spending accounts, administration, and government health insurance program services. It offers banking services in North Dakota, Minnesota, and Arizona; and retirement and benefit plans through offices located in Michigan, Minnesota, and Colorado. The company was formerly known as First National Bank North Dakota and changed its name to Alerus Financial Corporation in 2000. Alerus Financial Corporation was founded in 1879 and is headquartered in Grand Forks, North Dakota.