Head to Head Contrast: Prime Meridian (OTCMKTS:PMHG) & Texas Community Bancshares (NASDAQ:TCBS)

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

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Texas Community Bancshares	$20.55 million	2.26	-$1.30 million	$0.85	18.78
Prime Meridian	$50.36 million	3.59	$8.49 million	$2.48	21.57

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Texas Community Bancshares	9.98%	4.77%	0.57%
Prime Meridian	15.49%	9.27%	0.87%

Risk and Volatility

Texas Community Bancshares has a beta of 0.06, meaning that its stock price is 94% less volatile than the S&P 500. Comparatively, Prime Meridian has a beta of 0.17, meaning that its stock price is 83% less volatile than the S&P 500.

Institutional and Insider Ownership

15.8% of Texas Community Bancshares shares are owned by institutional investors. Comparatively, 11.8% of Prime Meridian shares are owned by institutional investors. 19.5% of Texas Community Bancshares shares are owned by company insiders. Comparatively, 25.9% of Prime Meridian shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Dividends

Texas Community Bancshares pays an annual dividend of $0.16 per share and has a dividend yield of 1.0%. Prime Meridian pays an annual dividend of $1.00 per share and has a dividend yield of 1.9%. Texas Community Bancshares pays out 18.8% of its earnings in the form of a dividend. Prime Meridian pays out 40.3% 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. Texas Community Bancshares has increased its dividend for 1 consecutive years.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Texas Community Bancshares and Prime Meridian, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Texas Community Bancshares	0	1	0	0	2.00
Prime Meridian	0	0	0	0	0.00

Summary

Prime Meridian beats Texas Community Bancshares on 11 of the 15 factors compared between the two stocks.

About Texas Community Bancshares

Texas Community Bancshares, Inc. operates as the bank holding company for Mineola Community Bank, S.S.B. that provides loans and banking services to consumers and commercial customers in Mineola, Texas and the surrounding area, and the Dallas Fort Worth Metroplex. It generates a selection of deposit accounts, including savings accounts, checking accounts, certificates of deposit, and individual retirement accounts. The company also originates primarily one- to four-family residential mortgage loans, commercial real estate loans, and construction and land loans; and car, boat, share, unsecured loans, etc., as well as agricultural loans, commercial loans, and consumer and other loans. In addition, it invests in securities; and offers sweep account, safe deposit boxes, e-statement, cards, online banking, and mobile banking services. Texas Community Bancshares, Inc. was founded in 1934 and is headquartered in Mineola, Texas.

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.