Summit State Bank (NASDAQ:SSBI) and Bank of Montreal (NYSE:BMO) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, earnings, risk, valuation, institutional ownership, dividends and analyst recommendations.

Earnings and Valuation

This table compares Summit State Bank and Bank of Montreal’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Summit State Bank $22.43 million 3.12 $3.29 million N/A N/A
Bank of Montreal $25.01 billion 1.85 $4.24 billion $6.99 10.35

Bank of Montreal has higher revenue and earnings than Summit State Bank.

Profitability

This table compares Summit State Bank and Bank of Montreal’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Summit State Bank 19.29% N/A N/A
Bank of Montreal 16.91% 14.97% 0.80%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Summit State Bank and Bank of Montreal, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Summit State Bank 0 0 0 0 N/A
Bank of Montreal 0 5 3 0 2.38

Bank of Montreal has a consensus target price of $114.50, indicating a potential upside of 58.21%. Given Bank of Montreal’s higher possible upside, analysts plainly believe Bank of Montreal is more favorable than Summit State Bank.

Insider & Institutional Ownership

13.7% of Summit State Bank shares are owned by institutional investors. Comparatively, 43.9% of Bank of Montreal shares are owned by institutional investors. 1.0% of Bank of Montreal shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Volatility and Risk

Summit State Bank has a beta of 0.42, indicating that its share price is 58% less volatile than the S&P 500. Comparatively, Bank of Montreal has a beta of 1.16, indicating that its share price is 16% more volatile than the S&P 500.

Dividends

Summit State Bank pays an annual dividend of $0.48 per share and has a dividend yield of 4.1%. Bank of Montreal pays an annual dividend of $2.92 per share and has a dividend yield of 4.0%. Bank of Montreal pays out 41.8% of its earnings in the form of a dividend. Bank of Montreal has raised its dividend for 2 consecutive years.

Summary

Bank of Montreal beats Summit State Bank on 10 of the 15 factors compared between the two stocks.

About Summit State Bank

Summit State Bank provides various banking products and services to individuals and businesses primarily in Sonoma County, California. It offers personal and business checking, money market, sweep, savings, and demand accounts; time certificates of deposit; and specialized deposit accounts, such as professional, small business packaged, tiered, and Keogh and individual retirement accounts. The company also provides loans, including commercial loans and leases; lines of credit; commercial real estate, small business administration, residential mortgage, and construction loans; and home equity lines of credit, as well as term loans, credit lines to individuals, equipment loans, and business lines of credit. Its loan products also comprise loans for accounts receivable and inventory financing, loans to agriculture-related businesses, and equipment and expansion financing programs. In addition, the company provides Internet and telephone banking; and other services, including banking by appointment, online banking, direct payroll and social security deposits, letters of credit, access to national automated teller machine networks, courier, safe deposit boxes, night depository facilities, notary, travelers checks, lockbox, and banking by mail. Further, it offers cash management and electronic bill payment services. The company operates through five depository offices located in Santa Rosa, Rohnert Park, Healdsburg, and Petaluma, as well as loan production office in Roseville, California. Summit State Bank was founded in 1982 and is headquartered in Santa Rosa, California.

About Bank of Montreal

Bank of Montreal provides diversified financial services primarily in North America. It operates through three groups: Personal and Commercial Banking, Wealth Management, and BMO Capital Markets. The company's personal banking products and services include checking and savings accounts, credit cards, mortgages, creditor insurance products, and financial and investment advice services; and commercial banking products and services comprise business deposit accounts, commercial credit cards, business loans and commercial mortgages, cash management solutions, foreign exchange, and specialized banking programs for small business and commercial banking customers. It also offers equity and debt underwriting, corporate lending and project financing, mergers and acquisitions advisory services, securitization, treasury management, risk management, debt and equity research, and institutional sales and trading services to corporate, institutional, and government clients. In addition, the company offers trade finance, investment management, online investing, trust and estate services, tax planning, and investment solutions to institutional investors, as well as industry-leading research, sales, and trading services. It operates approximately 1,500 branches in Canada and the United States, as well as 2 smart branches in Edmonton and Calgary, Alberta. The company was founded in 1817 and is headquartered in Montreal, Canada.

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