Analyzing South Atlantic Bancshares (OTCMKTS:SABK) and Prime Meridian (OTCMKTS:PMHG)

Prime Meridian (OTCMKTS:PMHG) and South Atlantic Bancshares (OTCMKTS:SABK) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, risk, earnings, institutional ownership, profitability, analyst recommendations and dividends.

Volatility & Risk

Prime Meridian has a beta of 0.17, indicating that its share price is 83% less volatile than the S&P 500. Comparatively, South Atlantic Bancshares has a beta of 0.25, indicating that its share price is 75% less volatile than the S&P 500.

Valuation and Earnings

This table compares Prime Meridian and South Atlantic Bancshares”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Prime Meridian	$50.36 million	3.61	$8.49 million	$2.48	21.67
South Atlantic Bancshares	$93.28 million	1.60	$14.18 million	$1.89	10.54

South Atlantic Bancshares has higher revenue and earnings than Prime Meridian. South Atlantic Bancshares is trading at a lower price-to-earnings ratio than Prime Meridian, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

11.8% of Prime Meridian shares are held by institutional investors. Comparatively, 13.3% of South Atlantic Bancshares shares are held by institutional investors. 25.9% of Prime Meridian shares are held by company 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 Prime Meridian and South Atlantic Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Prime Meridian	15.49%	9.27%	0.87%
South Atlantic Bancshares	N/A	N/A	N/A

Analyst Recommendations

This is a summary of recent recommendations and price targets for Prime Meridian and South Atlantic Bancshares, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Prime Meridian	0	0	0	0	0.00
South Atlantic Bancshares	0	0	1	1	3.50

South Atlantic Bancshares has a consensus price target of $19.00, indicating a potential downside of 4.62%. Given South Atlantic Bancshares’ stronger consensus rating and higher possible upside, analysts clearly believe South Atlantic Bancshares is more favorable than Prime Meridian.

Dividends

Prime Meridian pays an annual dividend of $1.00 per share and has a dividend yield of 1.9%. South Atlantic Bancshares pays an annual dividend of $0.10 per share and has a dividend yield of 0.5%. Prime Meridian pays out 40.3% of its earnings in the form of a dividend. South Atlantic Bancshares pays out 5.3% 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.

Summary

South Atlantic Bancshares beats Prime Meridian on 9 of the 17 factors compared between the two stocks.

About Prime Meridian

Prime Meridian Holding Company operates as the bank holding company for Prime Meridian Bank that provides various consumer and commercial banking services to individuals and businesses. The company accepts various deposits, such as checking, money market, savings, term certificate of deposit, demand interest-bearing and noninterest-bearing, health savings, NOW, and escrow accounts, as well as retirement savings plans and time deposits. Its loan products include commercial real estate, residential real estate and home equity, small business administration, construction, equipment, and commercial loans; and consumer and other loans comprising financing of automobiles, boats, and recreational vehicles, as well as issues standby letters and business lines of credit. The company also offers debit and credit cards; mobile banking, remote and mobile deposit, Apple Pay, bank-to-bank transfer, and online banking services; and safe deposit, wire transfer, foreign exchange, direct deposits, notary, night depository, official checks, domestic collections, bank drafts, automated teller services, drive-in tellers, merchant card, and banking by mail services, as well as invests in securities. Prime Meridian Holding Company was founded in 2008 and is headquartered in Tallahassee, Florida.

About South Atlantic Bancshares

South Atlantic Bancshares, Inc. operates as the bank holding company for South Atlantic Bank that provides consumer and commercial banking products and services to individuals, small businesses, and corporations in South Carolina. The company offers checking, money market, and saving accounts, as well as certificate of deposit, individual retirement, and health saving accounts; personal, auto, and recreation loans, as well as home equity and ready reserve overdraft line of credits, and commercial lending products; and credit cards. It also provides cash management and merchant card services; remote deposit capture and automated clearing house services; online, mobile, and telephone banking services; personal and business checks; mortgage products and services; and wealth management services. The company operates offices in Myrtle Beach, Carolina Forest, North Myrtle Beach, Murrells Inlet, Pawleys Island, Georgetown, Mount Pleasant, Charleston, Bluffton, Hilton Head Island, and Beaufort, South Carolina. South Atlantic Bancshares, Inc. was founded in 2007 and is headquartered in Myrtle Beach, South Carolina.