Head to Head Survey: Associated Banc (NYSE:ASB) & Meridian (NASDAQ:MRBK)

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

Valuation & Earnings

This table compares Meridian and Associated Banc”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Meridian	$127.30 million	1.57	$21.84 million	$1.91	8.77
Associated Banc	$1.68 billion	3.42	$474.78 million	$2.89	10.70

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

Dividends

Meridian pays an annual dividend of $0.56 per share and has a dividend yield of 3.3%. Associated Banc pays an annual dividend of $1.00 per share and has a dividend yield of 3.2%. Meridian pays out 29.3% of its earnings in the form of a dividend. Associated Banc pays out 34.6% 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. Associated Banc has raised its dividend for 13 consecutive years. Meridian is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

58.6% of Meridian shares are owned by institutional investors. Comparatively, 83.0% of Associated Banc shares are owned by institutional investors. 14.1% of Meridian shares are owned by company insiders. Comparatively, 0.7% of Associated Banc shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current recommendations for Meridian and Associated Banc, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Meridian	1	1	2	0	2.25
Associated Banc	0	6	6	0	2.50

Meridian presently has a consensus target price of $20.00, suggesting a potential upside of 19.40%. Associated Banc has a consensus target price of $32.70, suggesting a potential upside of 5.74%. Given Meridian’s higher probable upside, equities research analysts clearly believe Meridian is more favorable than Associated Banc.

Volatility & Risk

Meridian has a beta of 0.65, meaning that its share price is 35% less volatile than the S&P 500. Comparatively, Associated Banc has a beta of 0.8, meaning that its share price is 20% less volatile than the S&P 500.

Profitability

This table compares Meridian and Associated Banc’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Meridian	11.46%	11.37%	0.89%
Associated Banc	19.87%	10.75%	1.13%

Summary

Associated Banc beats Meridian on 12 of the 17 factors compared between the two stocks.

About Meridian

Meridian Corporation is a bank holding company headquartered in Malvern, Pennsylvania. Through its principal subsidiary, Meridian Bank, the company provides commercial and community banking services to businesses, professionals and individuals in the Mid-Atlantic region. Meridian Bank offers business lending, commercial real estate financing, construction loans, equipment financing, residential and consumer lending, deposit accounts, cash-management services and online banking. The company also provides mortgage banking and wealth management services, including investment and financial planning solutions.

About Associated Banc

Associated Banc-Corp is a bank holding company headquartered in Green Bay, Wisconsin. Its principal subsidiary, Associated Bank, provides banking and financial services to individuals, businesses, and organizations. The company offers consumer and commercial banking products, including deposit accounts, mortgage and other lending, business financing, and cash-management services. It also provides wealth management and related financial services. Associated Bank primarily serves customers in Wisconsin, Illinois, and Minnesota through its branches and other service channels.