Financial Contrast: Guaranty Bancshares (NASDAQ:GNTY) vs. Meridian (NASDAQ:MRBK)

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

Dividends

Meridian pays an annual dividend of $0.50 per share and has a dividend yield of 3.0%. Guaranty Bancshares pays an annual dividend of $0.96 per share and has a dividend yield of 2.3%. Meridian pays out 49.5% of its earnings in the form of a dividend. Guaranty Bancshares pays out 34.9% 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.

Earnings & Valuation

This table compares Meridian and Guaranty Bancshares”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Meridian	$168.55 million	1.10	$13.24 million	$1.01	16.30
Guaranty Bancshares	$183.90 million	2.61	$30.04 million	$2.75	15.29

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

Profitability

This table compares Meridian and Guaranty Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Meridian	6.00%	6.99%	0.49%
Guaranty Bancshares	17.15%	10.13%	1.02%

Insider and Institutional Ownership

58.6% of Meridian shares are held by institutional investors. Comparatively, 39.4% of Guaranty Bancshares shares are held by institutional investors. 14.0% of Meridian shares are held by insiders. Comparatively, 26.4% of Guaranty Bancshares shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Risk & Volatility

Meridian has a beta of 0.81, meaning that its share price is 19% less volatile than the S&P 500. Comparatively, Guaranty Bancshares has a beta of 0.61, meaning that its share price is 39% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings for Meridian and Guaranty Bancshares, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Meridian	0	1	1	0	2.50
Guaranty Bancshares	0	2	1	0	2.33

Meridian presently has a consensus price target of $16.00, indicating a potential downside of 2.79%. Guaranty Bancshares has a consensus price target of $37.33, indicating a potential downside of 11.23%. Given Meridian’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Meridian is more favorable than Guaranty Bancshares.

Summary

Guaranty Bancshares beats Meridian on 9 of the 15 factors compared between the two stocks.

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.

About Guaranty Bancshares

Guaranty Bancshares, Inc. operates as the bank holding company for Guaranty Bank & Trust, N.A. that provides a range of commercial and consumer banking products and services for small- and medium-sized businesses, professionals, and individuals. The company offers checking and savings, money market, and business accounts, as well as certificates of deposit; and commercial and industrial, construction and development, 1-4 family residential, commercial real estate, farmland, agricultural, multi-family residential, and consumer loans. It also provides trustee, custodial and escrow, investment management, retirement plan, ATM, night depository, direct deposit, and cashier's check services, as well as online and mobile banking services; debit cards; letters of credit; and treasury management services, including wire transfer, positive pay, remote deposit capture, and automated clearinghouse services. Guaranty Bancshares, Inc. was founded in 1913 and is headquartered in Addison, Texas.