Meridian (NASDAQ:MRBK) vs. Fidelity D & D Bancorp (NASDAQ:FDBC) Critical Analysis

Meridian (NASDAQ:MRBKGet Rating) and Fidelity D & D Bancorp (NASDAQ:FDBCGet Rating) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, profitability, analyst recommendations, institutional ownership, risk, valuation and dividends.

Earnings and Valuation

This table compares Meridian and Fidelity D & D Bancorp’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Meridian $159.51 million 1.19 $35.58 million $4.97 6.26
Fidelity D & D Bancorp $83.75 million 2.39 $24.01 million $4.67 7.58

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

Risk and Volatility

Meridian has a beta of 0.5, indicating that its stock price is 50% less volatile than the S&P 500. Comparatively, Fidelity D & D Bancorp has a beta of 0.45, indicating that its stock price is 55% less volatile than the S&P 500.

Insider and Institutional Ownership

57.0% of Meridian shares are held by institutional investors. Comparatively, 14.8% of Fidelity D & D Bancorp shares are held by institutional investors. 13.4% of Meridian shares are held by insiders. Comparatively, 21.0% of Fidelity D & D Bancorp shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Meridian and Fidelity D & D Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Meridian 21.19% 19.52% 1.76%
Fidelity D & D Bancorp 29.85% 14.59% 1.21%

Analyst Ratings

This is a summary of current recommendations and price targets for Meridian and Fidelity D & D Bancorp, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Meridian 0 0 1 0 3.00
Fidelity D & D Bancorp 0 0 0 0 N/A

Meridian presently has a consensus price target of $45.00, indicating a potential upside of 44.60%. Given Meridian’s higher possible upside, analysts plainly believe Meridian is more favorable than Fidelity D & D Bancorp.

Dividends

Meridian pays an annual dividend of $0.80 per share and has a dividend yield of 2.6%. Fidelity D & D Bancorp pays an annual dividend of $1.32 per share and has a dividend yield of 3.7%. Meridian pays out 16.1% of its earnings in the form of a dividend. Fidelity D & D Bancorp pays out 28.3% 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. Meridian has raised its dividend for 1 consecutive years and Fidelity D & D Bancorp has raised its dividend for 7 consecutive years. Fidelity D & D Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Meridian beats Fidelity D & D Bancorp on 10 of the 16 factors compared between the two stocks.

About Meridian (Get Rating)

Meridian Corporation operates as the holding company for Meridian Bank that provides commercial banking products and services in Pennsylvania, New Jersey, Delaware, 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, and shared national credits; 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. It operates through a network of 6 full-service branches, and 19 other offices. The company was founded in 2004 and is headquartered in Malvern, Pennsylvania.

About Fidelity D & D Bancorp (Get Rating)

Fidelity D & D Bancorp, Inc. operates as the bank holding company for The Fidelity Deposit and Discount Bank that provides a range of banking, trust, and financial services to individuals, small businesses, and corporate customers. The company accepts savings, clubs, interest-bearing and non-interest-bearing checking, money market, and short- and long-term time deposits, as well as certificates of deposit. It also offers commercial and industrial, commercial real estate, consumer, and residential mortgage loans. In addition, the company provides alternative financial and insurance products with asset management services. As of April 21, 2022, it operated 22 full-service banking offices in Lackawanna, Luzerne, and Northampton counties, Pennsylvania. Fidelity D & D Bancorp, Inc. was founded in 1902 and is headquartered in Dunmore, Pennsylvania.

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