Contrast Sandy Spring Bancorp (NASDAQ:SASR) and Arrow Financial (NASDAQ:AROW)


Sandy Spring Bancorp (NASDAQ: SASRGet a rating) and Arrow Financial (NASDAQ: AROWGet a rating) are both small cap finance companies, but which is the better investment? We’ll compare the two companies based on their dividend strength, profitability, analyst recommendations, institutional ownership, earnings, risk and valuation.

Volatility and risk

Sandy Spring Bancorp has a beta of 1.01, suggesting its stock price is 1% more volatile than the S&P 500. By comparison, Arrow Financial has a beta of 0.6, suggesting its stock price is 40 % less volatile than the S&P 500.

Benefits and evaluation

This chart compares the gross revenue, earnings per share, and valuation of Sandy Spring Bancorp and Arrow Financial.

Gross revenue Price/sales ratio Net revenue Earnings per share Price/earnings ratio
Sandy Spring Bancorp $552.34 million 3.36 $235.11 million $4.36 9.53
Financial Arrow $147.92 million 3.81 $49.86 million $2.97 11.86

Sandy Spring Bancorp has higher revenue and profit than Arrow Financial. Sandy Spring Bancorp trades at a lower price-to-earnings ratio than Arrow Financial, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares the net margins, return on equity and return on assets of Sandy Spring Bancorp and Arrow Financial.

Net margins Return on equity return on assets
Sandy Spring Bancorp 36.97% 12.47% 1.45%
Financial Arrow 32.14% 13.24% 1.18%

Dividends

Sandy Spring Bancorp pays an annual dividend of $1.36 per share and has a dividend yield of 3.3%. Arrow Financial pays an annual dividend of $1.08 per share and has a dividend yield of 3.1%. Sandy Spring Bancorp pays 31.2% of its profits as a dividend. Arrow Financial pays 36.4% of its profits as a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings over the next few years. Sandy Spring Bancorp has increased its dividend for 13 consecutive years and Arrow Financial has increased its dividend for 21 consecutive years. Sandy Spring Bancorp is clearly the best dividend-paying stock, given its higher yield and lower payout ratio.

Analyst Notes

This is a breakdown of recent ratings and recommendations for Sandy Spring Bancorp and Arrow Financial, as provided by MarketBeat.

Sales Ratings Hold odds Buy reviews Strong buy odds Rating
Sandy Spring Bancorp 0 1 1 0 2.50
Financial Arrow 0 0 0 0 N / A

Sandy Spring Bancorp currently has a consensus target price of $51.50, suggesting a potential upside of 23.92%. Given Sandy Spring Bancorp’s possible higher upside, analysts clearly believe that Sandy Spring Bancorp is more favorable than Arrow Financial.

Insider and Institutional Ownership

66.4% of Sandy Spring Bancorp shares are held by institutional investors. By comparison, 43.8% of Arrow Financial’s shares are held by institutional investors. 3.2% of Sandy Spring Bancorp shares are held by insiders of the company. By comparison, 4.2% of Arrow Financial’s stock is held by company insiders. Strong institutional ownership indicates that hedge funds, large fund managers, and endowments believe a stock is poised for long-term growth.

Summary

Sandy Spring Bancorp beats Arrow Financial on 11 out of 16 factors compared between the two stocks.

About Sandy Spring Bancorp

(Get a rating)

Sandy Spring Bancorp, Inc. operates as a bank holding company for Sandy Spring Bank which provides commercial and retail banking, mortgage, private banking and trust services to individuals and businesses. It operates through three segments: Community Banking, Insurance and Investment Management. The Community Banking segment offers financial products and services, including various loan and deposit products. Its lending products include commercial real estate loans, commercial construction loans and other commercial loans; residential real estate loans; and consumer loans including home equity loans and lines of credit, installment loans and personal lines of credit. The Insurance segment provides general insurance agency services and annuities, such as commercial, personal and medical liability lines. The Investment Management segment offers investment management and financial planning, including cash flow analysis, investment review, tax and retirement planning, insurance analysis and estate planning to individuals , families, small businesses and associations. It also provides personal trust and wealth management services. The company operates a network of approximately 50 locations in Maryland, Northern Virginia and Washington DC Sandy Spring Bancorp, Inc. was founded in 1868 and is headquartered in Olney, Maryland.

About Arrow Financial

(Get a rating)

Arrow Financial Corporation, a bank holding company, provides corporate and personal banking, financial products and services. The Company’s deposit products include demand deposits, interest-bearing checking accounts, savings deposits, term deposits and other term deposits. Its lending activities include commercial loans, such as term loans, term notes and lines of credit; and commercial real estate loans to finance real estate purchases, refinances, expansions and improvements of commercial properties, as well as commercial construction and land development loans to finance projects. The Company’s lending businesses also include consumer installment loans to finance personal expenses, personal lines of credit, overdraft protection and automobile loans; and residential real estate loans, home fixed loans and home equity lines of credit for consumers to finance home renovations, debt consolidation, education and other uses. Additionally, it maintains an indirect lending program; and sells residential real estate loan originations in the secondary market. In addition, the company provides retirement planning, trust and estate administration services to individuals; and pension, profit sharing and corporate benefits administration services. In addition, it provides insurance agency services including group healthcare policies and life insurance products, as well as property and casualty insurance products; and investment advisory services to its proprietary mutual funds, as well as holds a real estate investment trust. The company operates in the upstate New York region in Warren, Washington, Saratoga, Essex, Clinton, Rensselaer, Albany and Schenectady counties and surrounding areas. It has 26 bank branches; and leases 12 bank branches, as well as two residential loan origination offices. Arrow Financial Corporation was founded in 1851 and is headquartered in Glens Falls, New York.



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