Truist Financial (NYSE:TFC) and Meridian Bancorp (NASDAQ:EBSB) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, profitability, risk, earnings, institutional ownership, analyst recommendations and dividends.

Dividends

Truist Financial pays an annual dividend of $1.80 per share and has a dividend yield of 5.7%. Meridian Bancorp pays an annual dividend of $0.32 per share and has a dividend yield of 3.2%. Truist Financial pays out 41.2% of its earnings in the form of a dividend. Meridian Bancorp pays out 24.6% 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. Meridian Bancorp has raised its dividend for 4 consecutive years.

Insider and Institutional Ownership

71.9% of Truist Financial shares are owned by institutional investors. Comparatively, 67.7% of Meridian Bancorp shares are owned by institutional investors. 0.4% of Truist Financial shares are owned by company insiders. Comparatively, 4.8% of Meridian Bancorp shares are owned by company 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 Truist Financial and Meridian Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Truist Financial 19.60% 8.98% 1.12%
Meridian Bancorp 23.49% 9.12% 1.02%

Analyst Recommendations

This is a summary of recent ratings and target prices for Truist Financial and Meridian Bancorp, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Truist Financial 0 7 12 0 2.63
Meridian Bancorp 0 0 2 0 3.00

Truist Financial presently has a consensus price target of $46.25, indicating a potential upside of 47.53%. Meridian Bancorp has a consensus price target of $17.50, indicating a potential upside of 75.53%. Given Meridian Bancorp’s stronger consensus rating and higher possible upside, analysts clearly believe Meridian Bancorp is more favorable than Truist Financial.

Volatility and Risk

Truist Financial has a beta of 1.46, meaning that its stock price is 46% more volatile than the S&P 500. Comparatively, Meridian Bancorp has a beta of 0.91, meaning that its stock price is 9% less volatile than the S&P 500.

Valuation & Earnings

This table compares Truist Financial and Meridian Bancorp’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Truist Financial $14.66 billion 2.88 $3.22 billion $4.37 7.17
Meridian Bancorp $279.42 million 1.87 $67.00 million $1.30 7.67

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

Summary

Truist Financial beats Meridian Bancorp on 10 of the 17 factors compared between the two stocks.

Truist Financial Company Profile

Truist Financial Corp., formerly BB&T, is a bank holding company based in Charlotte, North Carolina. Its bank operates 2,049 branches in 15 states and Washington, D.C., and offers consumer and commercial banking, securities brokerage, asset management, mortgage, and insurance products and services.

Meridian Bancorp Company Profile

Meridian Bancorp, Inc. operates as the holding company for East Boston Savings Bank that provides various financial products and services for individuals and businesses primarily in Suffolk, Norfolk, Middlesex and Essex Counties, Massachusetts. The company accepts various deposit products, including non-interest-bearing demand deposits, such as checking accounts; interest-bearing demand accounts comprising NOW and money market accounts; savings accounts; and certificates of deposits, as well as commercial checking accounts. Its loan portfolio includes commercial real estate loans, which are secured by properties used for business purposes, such as office buildings, industrial facilities, and retail facilities; one- to four-family residential loans comprising mortgage loans that enable borrowers to purchase or refinance existing homes; multi-family real estate loans; construction loans; commercial and industrial loans; home equity lines of credit; and consumer loans that include automobile loans, loans secured by savings or certificate accounts, credit builders, and annuity and overdraft loans. In addition, the company offers non-deposit financial products, which comprise mutual funds, annuities, stocks, and bonds through a third-party broker-dealer; and long-term care insurance products. Further, it is also involved in the securities transactions business; and holding foreclosed real estate properties. The company operates 37 full-service locations, as well as 1 mobile branch and 3 loan centers. Meridian Bancorp, Inc. was founded in 1848 and is headquartered in Peabody, Massachusetts.

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