Reviewing Primis Financial (NASDAQ:FRST) and Meridian (NASDAQ:MRBK)

Primis Financial (NASDAQ:FRST) and Meridian (NASDAQ:MRBK) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, institutional ownership, dividends, profitability, valuation and analyst recommendations.

Profitability

This table compares Primis Financial and Meridian’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Primis Financial	19.19%	5.49%	0.55%
Meridian	11.89%	12.29%	0.95%

Earnings & Valuation

This table compares Primis Financial and Meridian”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Primis Financial	$277.00 million	1.39	$61.44 million	$2.16	7.21
Meridian	$205.49 million	1.07	$21.84 million	$2.06	8.98

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

Institutional and Insider Ownership

75.0% of Primis Financial shares are held by institutional investors. Comparatively, 58.6% of Meridian shares are held by institutional investors. 10.9% of Primis Financial shares are held by insiders. Comparatively, 14.1% of Meridian shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Volatility and Risk

Primis Financial has a beta of 0.73, indicating that its stock price is 27% less volatile than the S&P 500. Comparatively, Meridian has a beta of 0.65, indicating that its stock price is 35% less volatile than the S&P 500.

Dividends

Primis Financial pays an annual dividend of $0.40 per share and has a dividend yield of 2.6%. Meridian pays an annual dividend of $0.56 per share and has a dividend yield of 3.0%. Primis Financial pays out 18.5% of its earnings in the form of a dividend. Meridian pays out 27.2% 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.

Analyst Ratings

This is a summary of recent recommendations for Primis Financial and Meridian, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Primis Financial	0	0	2	1	3.33
Meridian	1	0	3	0	2.50

Primis Financial presently has a consensus target price of $17.50, suggesting a potential upside of 12.43%. Meridian has a consensus target price of $22.00, suggesting a potential upside of 18.89%. Given Meridian’s higher probable upside, analysts clearly believe Meridian is more favorable than Primis Financial.

Summary

Primis Financial beats Meridian on 10 of the 17 factors compared between the two stocks.

About Primis Financial

Primis Financial Corp. operates as the bank holding company for Primis Bank that provides a range of financial services to individuals and small and medium sized businesses in the United States. Its deposit products include checking, NOW, savings, and money market accounts, as well as certificates of deposits. The company also provides commercial business and real estate, construction, secured asset based, small business administration, mortgage warehouse lending products, as well as financing for medical, dental, and veterinary businesses; residential mortgage, trust mortgage, home equity lines of credit, secured and unsecured personal, and consumer loans, as well as life insurance premium financing and demand loans. It also offers cash management services comprising investment/sweep, zero balance, and controlled disbursement accounts; and wire transfer, employer/payroll processing, night depository, depository transfer, merchant, ACH origination, and remote deposit capture services. In addition, the company provides debit cards, ATM services, notary services, and mobile and online banking. It operates full-service branches in Virginia and Maryland. The company was formerly known as Southern National Bancorp of Virginia, Inc. and changed its name to Primis Financial Corp. Primis Financial Corp. was founded in 2004 and is based in McLean, Virginia.

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.