Prime Meridian (OTCMKTS:PMHG) and Farmers National Banc (NASDAQ:FMNB) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, valuation, institutional ownership, earnings and dividends.
This table compares Prime Meridian and Farmers National Banc’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Farmers National Banc||27.11%||12.46%||1.46%|
Valuation & Earnings
This table compares Prime Meridian and Farmers National Banc’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Prime Meridian||$17.54 million||3.71||$4.04 million||N/A||N/A|
|Farmers National Banc||$117.26 million||3.75||$32.57 million||$1.15||13.83|
Farmers National Banc has higher revenue and earnings than Prime Meridian.
Risk & Volatility
Prime Meridian has a beta of 0.75, meaning that its stock price is 25% less volatile than the S&P 500. Comparatively, Farmers National Banc has a beta of 0.88, meaning that its stock price is 12% less volatile than the S&P 500.
This is a summary of recent ratings for Prime Meridian and Farmers National Banc, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Farmers National Banc||0||0||2||0||3.00|
Farmers National Banc has a consensus price target of $15.75, indicating a potential downside of 1.01%. Given Farmers National Banc’s higher probable upside, analysts clearly believe Farmers National Banc is more favorable than Prime Meridian.
Prime Meridian pays an annual dividend of $0.12 per share and has a dividend yield of 0.6%. Farmers National Banc pays an annual dividend of $0.40 per share and has a dividend yield of 2.5%. Farmers National Banc pays out 34.8% of its earnings in the form of a dividend. Farmers National Banc has raised its dividend for 2 consecutive years. Farmers National Banc is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Insider and Institutional Ownership
10.4% of Prime Meridian shares are owned by institutional investors. Comparatively, 40.9% of Farmers National Banc shares are owned by institutional investors. 8.7% of Farmers National Banc shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Farmers National Banc beats Prime Meridian on 13 of the 15 factors compared between the two stocks.
Prime Meridian Company Profile
Prime Meridian Holding Company operates as the bank holding company for Prime Meridian Bank that provides consumer and commercial banking products and services to individuals and businesses in the United States. The company offers various deposit products, including checking, money-market, savings, term certificate of deposit, demand interest-bearing and non-interest-bearing, NOW, and escrow accounts, as well as retirement savings plans and time deposits. It also provides a range of loan products comprising commercial real estate, residential real estate and home equity, construction, and commercial loans; and consumer loans, such as automobiles, boats, and recreational vehicles, as well as standby letters of credit. In addition, the company offers electronic banking services, such as mobile banking, remote deposit, mobile deposit, Apple Pay, bank-to-bank transfer, and online banking services; and safe deposit, wire transfer, foreign exchange, notary, night depository, investment, and automated teller services, as well as debit cards, direct deposits, official checks, domestic collections, bank drafts, drive-in tellers, banking by mail, and credit and merchant cards. As of December 31, 2018, Prime Meridian Holding Company had three banking offices in Tallahassee and Crawfordville, Florida. The company was founded in 2008 and is headquartered in Tallahassee, Florida.
Farmers National Banc Company Profile
Farmers National Banc Corp., through its subsidiaries, operates in the banking, trust, retirement consulting, insurance, and financial management industries. The company offers commercial and retail banking services, including checking, savings, and time deposit accounts; commercial, mortgage and installment, and home equity loans; home equity lines of credit, night depository, safe deposit box, money order, bank check, automated teller machine, Internet banking, travel card, E bond transaction, MasterCard and Visa credit cards, brokerage, and other services. It also provides personal and corporate trust services in the areas of estate settlement, trust administration, and employee benefit plans; retirement services; property and casualty insurance products and services; and various insurance products through licensed representatives, as well as invests in municipal securities. The company operates in through 39 locations and two-branch locations in southwestern Pennsylvania. Farmers National Banc Corp. was founded in 1887 and is headquartered in Canfield, Ohio.
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