Comparing S&T Bancorp (NASDAQ:STBA) & Meridian Bank (NASDAQ:MRBK)

Meridian Bank (NASDAQ:MRBK) and S&T Bancorp (NASDAQ:STBA) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, valuation, risk, institutional ownership, dividends, profitability and earnings.

Earnings & Valuation

This table compares Meridian Bank and S&T Bancorp”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Meridian Bank	$205.49 million	1.14	$21.84 million	$2.06	9.53
S&T Bancorp	$568.51 million	3.11	$134.23 million	$3.76	13.33

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

Analyst Ratings

This is a breakdown of current ratings and price targets for Meridian Bank and S&T Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Meridian Bank	1	0	3	0	2.50
S&T Bancorp	0	4	2	1	2.57

Meridian Bank presently has a consensus target price of $22.00, indicating a potential upside of 12.02%. S&T Bancorp has a consensus target price of $51.60, indicating a potential upside of 2.93%. Given Meridian Bank’s higher probable upside, equities analysts plainly believe Meridian Bank is more favorable than S&T Bancorp.

Dividends

Meridian Bank pays an annual dividend of $0.56 per share and has a dividend yield of 2.9%. S&T Bancorp pays an annual dividend of $1.48 per share and has a dividend yield of 3.0%. Meridian Bank pays out 27.2% of its earnings in the form of a dividend. S&T Bancorp pays out 39.4% 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. S&T Bancorp has raised its dividend for 13 consecutive years. S&T Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

Meridian Bank has a beta of 0.64, indicating that its share price is 36% less volatile than the S&P 500. Comparatively, S&T Bancorp has a beta of 0.84, indicating that its share price is 16% less volatile than the S&P 500.

Insider and Institutional Ownership

58.6% of Meridian Bank shares are owned by institutional investors. Comparatively, 65.2% of S&T Bancorp shares are owned by institutional investors. 14.1% of Meridian Bank shares are owned by insiders. Comparatively, 1.2% of S&T Bancorp shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Meridian Bank and S&T Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Meridian Bank	11.89%	12.29%	0.95%
S&T Bancorp	24.51%	9.74%	1.42%

Summary

S&T Bancorp beats Meridian Bank on 13 of the 18 factors compared between the two stocks.

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.

About S&T Bancorp

S&T Bancorp, Inc. is a bank holding company, which engages in the provision of consumer, commercial, and small business banking services. It operates through the following segments: Commercial Real Estate, Commercial and Industrial, Commercial Construction, Business Banking, Consumer Real Estate, and Other Consumer. The Commercial Real Estate segment includes both owner-occupied properties and investment properties for various purposes such as hotels, retail, multifamily and health care. The Commercial and Industrial segment focuses on the companies or manufacturers for the purpose of production, operating capacity, accounts receivable, inventory or equipment financing. The Commercial Construction segment refers to the finance construction of buildings or other structures, as well as to finance the acquisition and development of raw land for various purposes. The Business Banking segment is made to small businesses that are standard, non-complex products evaluated through a streamlined credit approval process that has been designed to maximize efficiency while maintaining high credit quality standards. The Consumer Real Estate segment offers first and second liens such as 1-4 family residential mortgages, home equity loans and home equity lines of credit. The Other Consumer segment consists of individuals that may be secured by assets other than 1-4 family residences, as well as unsecured loans. The company was founded on March 17, 1983 and is headquartered in Indiana, PA.