Contrasted Meridian (NASDAQ:MRBK) & Northwest Bancshares (NASDAQ:NWBI)


Meridian (NASDAQ: MRBKGet a rating) and Northwest Bancshares (NASDAQ: NWBIGet a rating) are both small-cap finance companies, but which stock is superior? We’ll compare the two companies based on their risk strength, valuation, institutional ownership, earnings, profitability, dividends, and analyst recommendations.

Analyst Notes

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

Sales Ratings Hold odds Buy reviews Strong buy odds Rating
Meridian 0 0 1 0 3.00
North West Bank 1 3 0 0 1.75

Meridian currently has a consensus target price of $45.00, indicating a potential upside of 52.08%. Northwest Bancshares has a consensus target price of $13.01, indicating a potential upside of 3.47%. Given Meridian’s stronger consensus rating and higher likely upside, research analysts clearly think Meridian is more favorable than Northwest Bancshares.

Dividends

Meridian pays an annual dividend of $0.80 per share and has a dividend yield of 2.7%. Northwest Bancshares pays an annual dividend of $0.80 per share and has a dividend yield of 6.4%. Meridian pays 16.1% of its earnings as a dividend. Northwest Bancshares pays 72.1% of its earnings 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. Meridian increased its dividend for 1 consecutive year and Northwest Bancshares increased its dividend for 13 consecutive years. Northwest Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares the net margins, return on equity and return on assets of Meridian and Northwest Bancshares.

Net margins Return on equity return on assets
Meridian 21.19% 19.52% 1.76%
North West Bank 26.19% 9.12% 0.99%

Benefits and evaluation

This table compares revenue, earnings per share and valuation of Meridian and Northwest Bancshares.

Gross revenue Price/sales ratio Net revenue Earnings per share Price/earnings ratio
Meridian $159.51 million 1.13 $35.58 million $4.97 5.95
North West Bank $561.40 million 2.84 $154.32 million $1.11 11:32 am

Northwest Bancshares has higher revenues and profits than Meridian. Meridian trades at a lower price-to-earnings ratio than Northwest Bancshares, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

57.0% of Meridian shares are held by institutional investors. By comparison, 61.2% of Northwest Bancshares shares are held by institutional investors. 13.4% of Meridian shares are held by insiders. By comparison, 1.0% of Northwest Bancshares shares are held by insiders. Strong institutional ownership indicates that large money managers, endowments, and hedge funds believe a company is poised for long-term growth.

Risk and Volatility

Meridian has a beta of 0.5, which means its stock price is 50% less volatile than the S&P 500. In comparison, Northwest Bancshares has a beta of 0.56, which means its stock price is 44% less volatile than the S&P 500.

Summary

Northwest Bancshares beats Meridian on 9 out of 17 factors compared between the two stocks.

About Meridian (Get a rating)

Meridian Corporation operates as the holding company of Meridian Bank which provides commercial banking products and services in Pennsylvania, New Jersey, Delaware and Maryland. The Company offers various deposit products, such as interest-free current accounts, current accounts, savings accounts, money market accounts and term deposits. It also provides commercial and industrial loans including commercial lines of credit, term loans, small business loans, leases and national credit shares; commercial real estate and loans for the development and construction of land for residential and commercial projects; and consumer and home equity lending, private banking, merchant services, and title and land settlement services. In addition, the company manages and grants mortgage loans for 1 to 4 family homes; and offers real estate holding, investment advice and equipment rental services. It operates through a network of 6 full-service branches and 19 other offices. The company was founded in 2004 and is based in Malvern, Pennsylvania.

About Northwest Bancshares (Get a rating)

Northwest Bancshares, Inc. operates as the holding company of Northwest Bank, a state-chartered savings bank that provides personal and business banking solutions. The company accepts a variety of deposits, including checks, savings, money market deposits, term certificates, and individual retirement accounts. It also offers lending products including one to four-family residential real estate loans and loans secured by multi-family residential and commercial real estate; commercial business loans; and consumer loans, including auto loans, sales financing loans, unsecured personal loans, credit card loans and loans secured by deposit accounts. The company also offers investment management and trust services. As of December 31, 2021, it operated 170 community banking locations in Pennsylvania, Western New York, Eastern Ohio and Indiana. Northwest Bancshares, Inc. was founded in 1896 and is headquartered in Columbus, Ohio.



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