Meridian (NASDAQ:MRBK) and Regions Financial (NYSE:RF) Head-To-Head Comparison

Meridian (NASDAQ:MRBK) and Regions Financial (NYSE:RF) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, earnings, analyst recommendations, valuation, risk, dividends and institutional ownership.

Dividends

Meridian pays an annual dividend of $0.50 per share and has a dividend yield of 5.6%. Regions Financial pays an annual dividend of $0.96 per share and has a dividend yield of 5.0%. Meridian pays out 43.5% of its earnings in the form of a dividend. Regions Financial pays out 45.9% 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 has raised its dividend for 1 consecutive years and Regions Financial has raised its dividend for 3 consecutive years. Meridian is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Meridian	7.86%	8.54%	0.59%
Regions Financial	22.66%	14.50%	1.43%

Volatility and Risk

Meridian has a beta of 0.68, suggesting that its share price is 32% less volatile than the S&P 500. Comparatively, Regions Financial has a beta of 1.21, suggesting that its share price is 21% more volatile than the S&P 500.

Insider and Institutional Ownership

58.6% of Meridian shares are owned by institutional investors. Comparatively, 79.4% of Regions Financial shares are owned by institutional investors. 14.0% of Meridian shares are owned by company insiders. Comparatively, 0.3% of Regions Financial shares are owned 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.

Earnings and Valuation

This table compares Meridian and Regions Financial’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Meridian	$100.91 million	0.99	$13.24 million	$1.15	7.74
Regions Financial	$9.15 billion	1.93	$2.07 billion	$2.09	9.20

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

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Meridian and Regions Financial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Meridian	0	1	0	0	2.00
Regions Financial	1	11	6	0	2.28

Meridian presently has a consensus price target of $13.00, suggesting a potential upside of 46.07%. Regions Financial has a consensus price target of $20.39, suggesting a potential upside of 6.11%. Given Meridian’s higher possible upside, research analysts clearly believe Meridian is more favorable than Regions Financial.

Summary

Regions Financial beats Meridian on 13 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 Regions Financial

Regions Financial Corporation, a financial holding company, provides banking and bank-related services to individual and corporate customers. It operates through three segments: Corporate Bank, Consumer Bank, and Wealth Management. The Corporate Bank segment offers commercial banking services, such as commercial and industrial, commercial real estate, and investor real estate lending; equipment lease financing; deposit products; and securities underwriting and placement, loan syndication and placement, foreign exchange, derivatives, merger and acquisition, and other advisory services. It serves corporate, middle market, and commercial real estate developers and investors. The Consumer Bank segment provides consumer banking products and services related to residential first mortgages, home equity lines and loans, consumer credit cards, and other consumer loans, as well as deposits. The Wealth Management segment offers credit related products, and retirement and savings solutions; and trust and investment management, asset management, and estate planning services to individuals, businesses, governmental institutions, and non-profit entities. It also provides investment and insurance products; low-income housing tax credit corporate fund syndication services; and other specialty financing services. The company was founded in 1971 and is headquartered in Birmingham, Alabama.