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

Analyst Recommendations

This is a breakdown of current ratings for Nicolet Bankshares and Meridian Bancorp, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nicolet Bankshares 0 4 1 0 2.20
Meridian Bancorp 0 1 0 0 2.00

Nicolet Bankshares presently has a consensus target price of $60.10, indicating a potential upside of 11.03%. Meridian Bancorp has a consensus target price of $24.00, indicating a potential upside of 41.59%. Given Meridian Bancorp’s higher probable upside, analysts plainly believe Meridian Bancorp is more favorable than Nicolet Bankshares.

Volatility and Risk

Nicolet Bankshares has a beta of 0.88, indicating that its stock price is 12% less volatile than the S&P 500. Comparatively, Meridian Bancorp has a beta of 0.15, indicating that its stock price is 85% less volatile than the S&P 500.

Dividends

Meridian Bancorp pays an annual dividend of $0.20 per share and has a dividend yield of 1.2%. Nicolet Bankshares does not pay a dividend. Meridian Bancorp pays out 21.1% of its earnings in the form of a dividend. Meridian Bancorp has increased its dividend for 2 consecutive years.

Profitability

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

Net Margins Return on Equity Return on Assets
Nicolet Bankshares 24.13% 10.62% 1.30%
Meridian Bancorp 21.43% 8.50% 1.03%

Insider & Institutional Ownership

32.6% of Nicolet Bankshares shares are held by institutional investors. Comparatively, 67.1% of Meridian Bancorp shares are held by institutional investors. 16.4% of Nicolet Bankshares shares are held by company insiders. Comparatively, 5.3% of Meridian Bancorp 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.

Valuation and Earnings

This table compares Nicolet Bankshares and Meridian Bancorp’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Nicolet Bankshares $143.89 million 3.63 $33.15 million $3.42 15.83
Meridian Bancorp $208.17 million 4.39 $42.94 million $0.95 17.84

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

Summary

Nicolet Bankshares beats Meridian Bancorp on 9 of the 17 factors compared between the two stocks.

Nicolet Bankshares Company Profile

Nicolet Bankshares, Inc. operates as the holding company for Nicolet National Bank that provides commercial and retail banking services for businesses and individuals. The company accepts checking, savings, and money market accounts; various certificates of deposit; and individual retirement accounts. It also offers commercial loans, including commercial, industrial, and business loans and lines of credit; owner-occupied commercial real estate loans; agricultural (AG) production and AG real estate loans; commercial real estate investment real estate loans; construction and land development loans; residential real estate loans, such as residential first lien mortgages, junior lien mortgages, home equity loans, lines of credit, and residential construction loans; and consumer loans. In addition, the company provides cash management, international banking, personal brokerage, safe deposit boxes, and trust and fiduciary, as well as wealth management and retirement plan services. Further, it offers mortgage refinancing; online services, such as commercial, retail, and trust online banking; automated bill payment, mobile banking deposits and account access, remote deposit capture, and telephone banking services; and other services consisting of wire transfers, debit cards, credit cards, pre-paid gift cards, direct deposits, official bank checks. Additionally, the company provides investment strategy and transactional services to financial institutions. As of December 31, 2017, it operated 38 branches located in northeast and central Wisconsin, as well as in Menominee, Michigan. The company was formerly known as Green Bay Financial Corporation and changed its name to Nicolet Bankshares, Inc. in March 2002. Nicolet Bankshares, Inc. was founded in 2000 and is headquartered in Green Bay, Wisconsin.

Meridian Bancorp Company Profile

Meridian Bancorp, Inc. operates as the holding company for East Boston Savings Bank that provides various financial products and services for individuals and businesses primarily in Essex, Middlesex, Norfolk, and Suffolk Counties, Massachusetts. The company accepts various deposit products, including non-interest-bearing demand deposits, such as checking accounts; interest-bearing demand accounts comprising NOW and money market accounts; savings accounts; and certificates of deposits, as well as commercial checking accounts. Its loan portfolio includes commercial real estate loans, which are secured by properties used for business purposes, such as office buildings, industrial facilities, and retail facilities; one- to four-family residential loans comprising mortgage loans that enable borrowers to purchase or refinance existing homes; multi-family real estate loans; construction loans; commercial and industrial loans; home equity lines of credit; and consumer loans that include automobile loans, loans secured by savings or certificate accounts, credit builders, and annuity and overdraft loans. In addition, the company offers non-deposit financial products, which comprise mutual funds, annuities, stocks, and bonds through a third-party broker-dealer; and long-term care insurance products. Further, it is also involved in the securities transactions business; and holding foreclosed real estate properties. As of March 1, 2018, the company operated 33 full-service locations, as well 1 mobile branch and 3 loan centers. Meridian Bancorp, Inc. was founded in 1848 and is headquartered in Peabody, Massachusetts.

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