Meridian Bancorp (NASDAQ:EBSB) and Sandy Spring Bancorp (NASDAQ:SASR) Head-To-Head Survey

Meridian Bancorp (NASDAQ:EBSB) and Sandy Spring Bancorp (NASDAQ:SASR) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, analyst recommendations, valuation, institutional ownership, dividends, profitability and risk.

Risk and Volatility

Meridian Bancorp has a beta of 0.92, meaning that its stock price is 8% less volatile than the S&P 500. Comparatively, Sandy Spring Bancorp has a beta of 1.11, meaning that its stock price is 11% more volatile than the S&P 500.

Profitability

This table compares Meridian Bancorp and Sandy Spring Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Meridian Bancorp 23.56% 8.74% 1.00%
Sandy Spring Bancorp 14.12% 7.29% 0.85%

Earnings & Valuation

This table compares Meridian Bancorp and Sandy Spring Bancorp’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Meridian Bancorp $279.42 million 3.34 $67.00 million $1.30 13.71
Sandy Spring Bancorp $419.19 million 4.80 $116.43 million $3.28 12.93

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

Analyst Recommendations

This is a breakdown of recent ratings for Meridian Bancorp and Sandy Spring Bancorp, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Meridian Bancorp 0 0 0 1 4.00
Sandy Spring Bancorp 0 3 1 0 2.25

Meridian Bancorp presently has a consensus target price of $15.00, indicating a potential downside of 15.82%. Sandy Spring Bancorp has a consensus target price of $35.00, indicating a potential downside of 17.47%. Given Meridian Bancorp’s stronger consensus rating and higher possible upside, research analysts plainly believe Meridian Bancorp is more favorable than Sandy Spring Bancorp.

Insider and Institutional Ownership

65.4% of Meridian Bancorp shares are owned by institutional investors. Comparatively, 60.9% of Sandy Spring Bancorp shares are owned by institutional investors. 4.8% of Meridian Bancorp shares are owned by company insiders. Comparatively, 3.0% of Sandy Spring Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

Meridian Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 2.2%. Sandy Spring Bancorp pays an annual dividend of $1.28 per share and has a dividend yield of 3.0%. Meridian Bancorp pays out 30.8% of its earnings in the form of a dividend. Sandy Spring Bancorp pays out 39.0% 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. Meridian Bancorp has raised its dividend for 1 consecutive years and Sandy Spring Bancorp has raised its dividend for 1 consecutive years.

Summary

Meridian Bancorp beats Sandy Spring Bancorp on 9 of the 17 factors compared between the two stocks.

About Meridian Bancorp

Meridian Bancorp, Inc. operates as the holding company for East Boston Savings Bank that provides various financial products and services for individuals and businesses primarily in Suffolk, Norfolk, Middlesex, and Essex Counties, Massachusetts. The company accepts various deposit products, including non-interest-bearing demand deposits, such as checking accounts; interest-bearing demand accounts, including NOW and money market accounts; savings accounts; and certificates of deposit, as well as commercial checking accounts. Its loan portfolio includes commercial real estate loans, which are secured by properties used for business purposes, such as office buildings, industrial facilities, and retail facilities; one- to four-family residential loans, such as mortgage loans that enable borrowers to purchase or refinance existing homes; multi-family real estate loans; construction loans; commercial and industrial loans; home equity lines of credit; and consumer loans, including automobile loans, loans secured by savings or certificate accounts, credit builders, and annuity and overdraft loans. The company also engages in the securities transactions business. The company operates 42 full-service locations, one mobile branch, and three loan centers. Meridian Bancorp, Inc. was founded in 1848 and is headquartered in Peabody, Massachusetts.

About Sandy Spring Bancorp

Sandy Spring Bancorp, Inc. is a bank holding company, which engages in the provision of commercial banking, retail banking, and trust services to individuals and businesses. It operates through the following segments: Community Banking, Insurance, and Investment Management. The Community Banking segment conducts its operations through Sandy Spring Bank and involves delivering financial products and services, including various loan and deposit products to both individuals and businesses. The Insurance segment includes operations through Sandy Spring Insurance Corp, a subsidiary of the bank, and offers annuities as an alternative to traditional deposit accounts. The Investment Management segment conducts its operations through West Financial Services, Inc., a subsidiary of the Bank. The company was founded in 1868 and is headquartered in Olney, MD.

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