Head to Head Comparison: Prime Meridian (OTCMKTS:PMHG) vs. Southern First Bancshares (NASDAQ:SFST)

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

Analyst Recommendations

This is a summary of current ratings for Prime Meridian and Southern First Bancshares, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Prime Meridian	0	0	0	0	0.00
Southern First Bancshares	0	0	1	0	3.00

Southern First Bancshares has a consensus target price of $51.00, suggesting a potential upside of 16.36%. Given Southern First Bancshares’ stronger consensus rating and higher possible upside, analysts clearly believe Southern First Bancshares is more favorable than Prime Meridian.

Risk & Volatility

Prime Meridian has a beta of 0.18, suggesting that its stock price is 82% less volatile than the S&P 500. Comparatively, Southern First Bancshares has a beta of 0.84, suggesting that its stock price is 16% less volatile than the S&P 500.

Earnings & Valuation

This table compares Prime Meridian and Southern First Bancshares”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Prime Meridian	$50.36 million	3.41	$8.49 million	$2.48	20.56
Southern First Bancshares	$213.35 million	1.68	$15.53 million	$2.70	16.23

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Prime Meridian	15.55%	9.25%	0.87%
Southern First Bancshares	10.09%	6.52%	0.52%

Institutional and Insider Ownership

11.8% of Prime Meridian shares are held by institutional investors. Comparatively, 75.0% of Southern First Bancshares shares are held by institutional investors. 25.9% of Prime Meridian shares are held by company insiders. Comparatively, 7.1% of Southern First Bancshares shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Southern First Bancshares beats Prime Meridian on 8 of the 14 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 Southern First Bancshares

Southern First Bancshares, Inc. operates as the bank holding company for Southern First Bank that provides commercial, consumer, and mortgage loans to the general public in South Carolina, North Carolina, and Georgia. The company accepts various deposit products that include checking accounts, commercial checking accounts, and savings accounts, as well as other time deposits, including daily money market accounts and long-term certificates of deposit. Its loan portfolio comprises commercial real estate loans; construction real estate loans; commercial business loans for various lines of businesses, such as the manufacturing, service industry, and professional service areas; consumer real estate and home equity loans; and other consumer loans, including secured and unsecured installment loans and revolving lines of credit. In addition, the company provides other bank services, such as internet banking, cash management, safe deposit boxes, direct deposit, automatic drafts, bill payment, and mobile banking services. Southern First Bancshares, Inc. was incorporated in 1999 and is headquartered in Greenville, South Carolina.