CNB Financial (NASDAQ:CCNE – Get Free Report) and Meridian Bank (NASDAQ:MRBK – Get Free Report) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, institutional ownership, profitability, valuation, analyst recommendations, risk and earnings.
Dividends
CNB Financial pays an annual dividend of $0.76 per share and has a dividend yield of 2.7%. Meridian Bank pays an annual dividend of $0.56 per share and has a dividend yield of 2.9%. CNB Financial pays out 31.3% of its earnings in the form of a dividend. Meridian Bank pays out 29.6% 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. CNB Financial has increased its dividend for 1 consecutive years. Meridian Bank is clearly the better dividend stock, given its higher yield and lower payout ratio.
Profitability
This table compares CNB Financial and Meridian Bank’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| CNB Financial | 15.29% | 11.83% | 1.10% |
| Meridian Bank | 10.63% | 12.14% | 0.86% |
Valuation & Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| CNB Financial | $432.51 million | 1.91 | $66.13 million | $2.43 | 11.53 |
| Meridian Bank | $205.49 million | 1.09 | $21.84 million | $1.89 | 10.29 |
CNB Financial has higher revenue and earnings than Meridian Bank. Meridian Bank is trading at a lower price-to-earnings ratio than CNB Financial, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
CNB Financial has a beta of 0.71, indicating that its share price is 29% less volatile than the S&P 500. Comparatively, Meridian Bank has a beta of 0.76, indicating that its share price is 24% less volatile than the S&P 500.
Analyst Recommendations
This is a summary of recent recommendations and price targets for CNB Financial and Meridian Bank, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| CNB Financial | 0 | 2 | 1 | 1 | 2.75 |
| Meridian Bank | 0 | 0 | 3 | 0 | 3.00 |
CNB Financial presently has a consensus price target of $32.00, indicating a potential upside of 14.24%. Meridian Bank has a consensus price target of $22.00, indicating a potential upside of 13.17%. Given CNB Financial’s higher probable upside, equities analysts plainly believe CNB Financial is more favorable than Meridian Bank.
Institutional and Insider Ownership
52.4% of CNB Financial shares are owned by institutional investors. Comparatively, 58.6% of Meridian Bank shares are owned by institutional investors. 2.9% of CNB Financial shares are owned by company insiders. Comparatively, 14.4% of Meridian Bank shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Summary
CNB Financial beats Meridian Bank on 10 of the 18 factors compared between the two stocks.
About CNB Financial
CNB Financial Corporation operates as the bank holding company for CNB Bank that provides a range of banking products and services for individual, business, governmental, and institutional customers. The company accepts checking, savings, and time deposit accounts; and offers real estate, commercial, industrial, residential, and consumer loans, as well as various other specialized financial services. It also provides private banking; and wealth and asset management services, including the administration of trusts and estates, retirement plans, and other employee benefit plans, as well as a range of wealth management services. In addition, the company invests in debt and equity securities; sells nonproprietary annuities and other insurance products; and offers small balance unsecured loans and secured loans primarily collateralized by automobiles and equipment, as well as engages in consumer discount loan and finance business. The company was founded in 1865 and is headquartered in Clearfield, Pennsylvania.
About Meridian Bank
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.
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