Comparing TriCo Bancshares (NASDAQ:TCBK) and Prime Meridian (OTCMKTS:PMHG)

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

Profitability

This table compares Prime Meridian and TriCo Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Prime Meridian	16.83%	9.76%	0.92%
TriCo Bancshares	21.12%	9.45%	1.14%

Volatility and Risk

Prime Meridian has a beta of 0.54, indicating that its share price is 46% less volatile than the S&P 500. Comparatively, TriCo Bancshares has a beta of 0.56, indicating that its share price is 44% less volatile than the S&P 500.

Dividends

Prime Meridian pays an annual dividend of $0.25 per share and has a dividend yield of 0.8%. TriCo Bancshares pays an annual dividend of $1.32 per share and has a dividend yield of 2.7%. Prime Meridian pays out 10.2% of its earnings in the form of a dividend. TriCo Bancshares pays out 39.3% 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. TriCo Bancshares has raised its dividend for 12 consecutive years. TriCo Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

11.8% of Prime Meridian shares are held by institutional investors. Comparatively, 59.1% of TriCo Bancshares shares are held by institutional investors. 25.9% of Prime Meridian shares are held by company insiders. Comparatively, 4.6% of TriCo Bancshares shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Prime Meridian	$41.82 million	2.32	$8.71 million	$2.46	12.01
TriCo Bancshares	$499.75 million	3.17	$117.39 million	$3.36	14.30

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

Analyst Ratings

This is a summary of current ratings and price targets for Prime Meridian and TriCo Bancshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Prime Meridian	0	0	0	0	0.00
TriCo Bancshares	0	3	3	0	2.50

TriCo Bancshares has a consensus target price of $48.20, suggesting a potential upside of 0.33%. Given TriCo Bancshares’ stronger consensus rating and higher possible upside, analysts clearly believe TriCo Bancshares is more favorable than Prime Meridian.

Summary

TriCo Bancshares beats Prime Meridian on 14 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 TriCo Bancshares

TriCo Bancshares operates as a bank holding company for Tri Counties Bank that provides commercial banking services to individual and corporate customers. The company accepts demand, savings, and time deposits. It also provides small business loans; real estate mortgage loans, such as residential and commercial loans; consumer loans; mortgage, auto, other vehicle, and personal loans; commercial loans, including agricultural loans; and real estate construction loans. In addition, the company offers treasury management services; credit and debit cards; and other customary banking services, including safe deposit boxes; and independent financial and broker-dealer services. Further, it provides checking, saving, and money market accounts, as well as individual retirement accounts; equipment financing; certificate of deposit account registry service; certificated of deposit; and IntraFi cash service. TriCo Bancshares was founded in 1975 and is headquartered in Chico, California.