Comparing Meridian Bank (NASDAQ:MRBK) & Citizens Financial Services (NASDAQ:CZFS)

Citizens Financial Services (NASDAQ:CZFS) and Meridian Bank (NASDAQ:MRBK) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, dividends, institutional ownership, earnings, valuation, risk and analyst recommendations.

Earnings & Valuation

This table compares Citizens Financial Services and Meridian Bank”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Citizens Financial Services	$169.72 million	1.81	$27.82 million	$5.98	10.77
Meridian Bank	$197.37 million	0.80	$16.35 million	$1.42	9.85

Citizens Financial Services has higher earnings, but lower revenue than Meridian Bank. Meridian Bank is trading at a lower price-to-earnings ratio than Citizens Financial Services, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent recommendations for Citizens Financial Services and Meridian Bank, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Citizens Financial Services	0	0	0	0	0.00
Meridian Bank	0	1	1	0	2.50

Meridian Bank has a consensus target price of $17.00, indicating a potential upside of 21.60%. Given Meridian Bank’s stronger consensus rating and higher probable upside, analysts clearly believe Meridian Bank is more favorable than Citizens Financial Services.

Volatility & Risk

Citizens Financial Services has a beta of 0.44, indicating that its share price is 56% less volatile than the S&P 500. Comparatively, Meridian Bank has a beta of 0.67, indicating that its share price is 33% less volatile than the S&P 500.

Institutional & Insider Ownership

22.5% of Citizens Financial Services shares are owned by institutional investors. Comparatively, 58.6% of Meridian Bank shares are owned by institutional investors. 6.1% of Citizens Financial Services shares are owned by insiders. Comparatively, 14.4% of Meridian Bank shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Dividends

Citizens Financial Services pays an annual dividend of $1.98 per share and has a dividend yield of 3.1%. Meridian Bank pays an annual dividend of $0.50 per share and has a dividend yield of 3.6%. Citizens Financial Services pays out 33.1% of its earnings in the form of a dividend. Meridian Bank pays out 35.2% 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.

Profitability

This table compares Citizens Financial Services and Meridian Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Citizens Financial Services	16.79%	9.83%	0.98%
Meridian Bank	8.09%	9.52%	0.67%

About Citizens Financial Services

Citizens Financial Services, Inc., a bank holding company, provides various banking products and services for individual, business, governmental, and institutional customers. The company accepts various deposit products, such as checking, savings, and time deposit accounts. Its loan products include residential, commercial, and agricultural real estate loans; commercial and industrial loans; state and political subdivision loans; and consumer loans, as well as various other specialized financial services. The company also provides professional trust administration, investment management services, estate planning and administration, custody of securities, and individual retirement accounts. In addition, it offers brokerage and financial planning services, as well as assistance in various oil and gas leasing matters; and provides mutual funds, annuities, and health and life insurance products. Citizens Financial Services, Inc. was incorporated in 1984 and is headquartered in Mansfield, 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.