Financial Contrast: Meridian (NASDAQ:MRBK) and Pioneer Bankshares (OTCMKTS:PNBI)

Meridian (NASDAQ:MRBK) and Pioneer Bankshares (OTCMKTS:PNBI) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, earnings, valuation, risk, institutional ownership, dividends and analyst recommendations.

Profitability

This table compares Meridian and Pioneer Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Meridian	7.86%	8.54%	0.59%
Pioneer Bankshares	N/A	N/A	N/A

Dividends

Meridian pays an annual dividend of $0.50 per share and has a dividend yield of 5.5%. Pioneer Bankshares pays an annual dividend of $1.00 per share and has a dividend yield of 4.3%. Meridian pays out 43.5% of its earnings in the form of a dividend. Meridian has raised its dividend for 1 consecutive years. Meridian is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

Meridian has a beta of 0.68, suggesting that its stock price is 32% less volatile than the S&P 500. Comparatively, Pioneer Bankshares has a beta of 0.34, suggesting that its stock price is 66% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings for Meridian and Pioneer Bankshares, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Meridian	0	1	0	0	2.00
Pioneer Bankshares	0	0	0	0	N/A

Meridian presently has a consensus target price of $13.00, suggesting a potential upside of 41.92%. Given Meridian’s higher probable upside, equities analysts clearly believe Meridian is more favorable than Pioneer Bankshares.

Insider and Institutional Ownership

58.6% of Meridian shares are owned by institutional investors. 14.0% of Meridian shares are owned by insiders. Comparatively, 13.7% of Pioneer Bankshares shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Meridian and Pioneer Bankshares’ top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Meridian	$100.91 million	1.02	$13.24 million	$1.15	7.97
Pioneer Bankshares	N/A	N/A	N/A	N/A	N/A

Meridian has higher revenue and earnings than Pioneer Bankshares.

Summary

Meridian beats Pioneer Bankshares on 10 of the 11 factors compared between the two stocks.

About Meridian

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 Pioneer Bankshares

Pioneer Bankshares, Inc. operates as the bank holding company for Pioneer Bank, Inc. that provides various banking and related financial services to individual consumers, small to medium size businesses, and professional community in the United States. The company offers various deposit products, which include business and personal checking accounts, savings accounts, and certificates of deposit. Its personal loans comprise personal installment and single-pay, and auto loans; and business loans consists of operating capital, equipment loans, investment properties, lines of credit, business expansion, and property acquisition or construction, as well as home mortgage and home equity loans. The company also provides credit and debit cards, safe deposit boxes, online and mobile banking tools, merchant services, and cash management services. In addition, it offers investment products, such as individual retirement accounts, 529 college savings plans, small business investment strategies, fixed and variable annuities, and personalized investment advisory services, as well as securities and insurance products and services. The company was founded in 1909 and is headquartered in Stanley, Virginia.