Meridian (NASDAQ:MRBK – Get Free Report) and Westamerica Bancorporation (NASDAQ:WABC – Get Free Report) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, risk, dividends, institutional ownership, earnings, valuation and analyst recommendations.
Volatility & Risk
Meridian has a beta of 0.74, indicating that its stock price is 26% less volatile than the S&P 500. Comparatively, Westamerica Bancorporation has a beta of 0.54, indicating that its stock price is 46% less volatile than the S&P 500.
Analyst Ratings
This is a breakdown of current ratings for Meridian and Westamerica Bancorporation, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Meridian | 0 | 1 | 1 | 0 | 2.50 |
| Westamerica Bancorporation | 0 | 3 | 0 | 0 | 2.00 |
Dividends
Meridian pays an annual dividend of $0.50 per share and has a dividend yield of 3.5%. Westamerica Bancorporation pays an annual dividend of $1.76 per share and has a dividend yield of 3.1%. Meridian pays out 49.5% of its earnings in the form of a dividend. Westamerica Bancorporation pays out 32.1% 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. Westamerica Bancorporation has raised its dividend for 32 consecutive years.
Profitability
This table compares Meridian and Westamerica Bancorporation’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Meridian | 6.00% | 6.99% | 0.49% |
| Westamerica Bancorporation | 45.73% | 17.67% | 2.30% |
Insider and Institutional Ownership
58.6% of Meridian shares are held by institutional investors. Comparatively, 81.9% of Westamerica Bancorporation shares are held by institutional investors. 14.0% of Meridian shares are held by company insiders. Comparatively, 4.4% of Westamerica Bancorporation shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Valuation and Earnings
This table compares Meridian and Westamerica Bancorporation”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Meridian | $168.55 million | 0.95 | $13.24 million | $1.01 | 14.09 |
| Westamerica Bancorporation | $304.55 million | 5.00 | $161.77 million | $5.49 | 10.39 |
Westamerica Bancorporation has higher revenue and earnings than Meridian. Westamerica Bancorporation is trading at a lower price-to-earnings ratio than Meridian, indicating that it is currently the more affordable of the two stocks.
Summary
Westamerica Bancorporation beats Meridian on 10 of the 17 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 Westamerica Bancorporation
Westamerica Bancorporation operates as a bank holding company for the Westamerica Bank that provides various banking products and services to individual and commercial customers. The company accepts various deposit products, including retail savings and checking accounts, as well as certificates of deposit. Its loan portfolio includes commercial, commercial and residential real estate, real estate construction, and consumer installment loans, as well as indirect automobile loans. The company was formerly known as Independent Bankshares Corporation and changed its name to Westamerica Bancorporation in 1983. The company was founded in 1884 and is headquartered in San Rafael, California.
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