Critical Comparison: Truxton (OTCMKTS:TRUX) versus Prime Meridian (OTCMKTS:PMHG)

Dividends

Prime Meridian pays an annual dividend of $1.00 per share and has a dividend yield of 2.1%. Truxton pays an annual dividend of $2.00 per share and has a dividend yield of 2.7%. Prime Meridian pays out 38.3% of its earnings in the form of a dividend. Truxton pays out 30.3% 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. Truxton is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares Prime Meridian and Truxton”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Prime Meridian	$50.36 million	3.25	$8.49 million	$2.61	18.62
Truxton	$78.37 million	2.72	$18.41 million	$6.61	11.20

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

Institutional & Insider Ownership

11.8% of Prime Meridian shares are held by institutional investors. Comparatively, 0.4% of Truxton shares are held by institutional investors. 25.9% of Prime Meridian shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Risk and Volatility

Prime Meridian has a beta of 0.19, meaning that its share price is 81% less volatile than the S&P 500. Comparatively, Truxton has a beta of 0.55, meaning that its share price is 45% less volatile than the S&P 500.

Profitability

This table compares Prime Meridian and Truxton’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Prime Meridian	16.86%	10.05%	0.95%
Truxton	23.49%	N/A	N/A

Summary

Truxton beats Prime Meridian on 7 of the 13 factors compared between the two stocks.

About Prime Meridian

Prime Meridian Holding Company operates as the bank holding company for Prime Meridian Bank that provides various consumer and commercial banking services to individuals and businesses. The company accepts various deposits, such as checking, money market, savings, term certificate of deposit, demand interest-bearing and noninterest-bearing, health savings, NOW, and escrow accounts, as well as retirement savings plans and time deposits. Its loan products include commercial real estate, residential real estate and home equity, small business administration, construction, equipment, and commercial loans; and consumer and other loans comprising financing of automobiles, boats, and recreational vehicles, as well as issues standby letters and business lines of credit. The company also offers debit and credit cards; mobile banking, remote and mobile deposit, Apple Pay, bank-to-bank transfer, and online banking services; and safe deposit, wire transfer, foreign exchange, direct deposits, notary, night depository, official checks, domestic collections, bank drafts, automated teller services, drive-in tellers, merchant card, and banking by mail services, as well as invests in securities. Prime Meridian Holding Company was founded in 2008 and is headquartered in Tallahassee, Florida.

About Truxton

Truxton Corporation, through its subsidiaries, provides various banking, investment management, and trust administration services to individuals, businesses, and charitable institutions in the United States. The company offers deposit products, including demand, money market accounts, and certificates of deposit. It also provides lending products, such as residential and commercial real estate mortgages, commercial loans, construction and land development loans, commercial and industrial loans, operating lines of credit, and loans to individual. In addition, the company offers strategic and capital advisory services, business banking, and treasury management services; and insurance products. The company was formerly known as NBT Holdings Inc. and changed its name to Truxton Corporation in May 2013. Truxton Corporation was founded in 2004 and is based in Nashville, Tennessee.