Clifton Bancorp (NASDAQ: CSBK) and Meridian Bancorp (NASDAQ:EBSB) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, valuation, dividends, profitabiliy, analyst recommendations, institutional ownership and risk.

Analyst Ratings

This is a summary of current ratings and price targets for Clifton Bancorp and Meridian Bancorp, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Clifton Bancorp 0 1 0 0 2.00
Meridian Bancorp 0 2 1 0 2.33

Clifton Bancorp currently has a consensus target price of $17.00, suggesting a potential upside of 2.72%. Meridian Bancorp has a consensus target price of $19.67, suggesting a potential upside of 18.12%. Given Meridian Bancorp’s stronger consensus rating and higher possible upside, analysts plainly believe Meridian Bancorp is more favorable than Clifton Bancorp.

Dividends

Clifton Bancorp pays an annual dividend of $0.24 per share and has a dividend yield of 1.5%. Meridian Bancorp pays an annual dividend of $0.16 per share and has a dividend yield of 1.0%. Clifton Bancorp pays out 109.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Meridian Bancorp pays out 23.2% of its earnings in the form of a dividend.

Insider and Institutional Ownership

62.7% of Clifton Bancorp shares are held by institutional investors. Comparatively, 65.5% of Meridian Bancorp shares are held by institutional investors. 6.3% of Clifton Bancorp shares are held by insiders. Comparatively, 5.1% of Meridian Bancorp shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings & Valuation

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Clifton Bancorp $28.59 million 12.48 $4.74 million $0.22 75.23
Meridian Bancorp $135.37 million 6.27 $35.15 million $0.69 24.13

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

Risk and Volatility

Clifton Bancorp has a beta of 0.4, meaning that its stock price is 60% less volatile than the S&P 500. Comparatively, Meridian Bancorp has a beta of 0.26, meaning that its stock price is 74% less volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Clifton Bancorp 10.93% 1.53% 0.34%
Meridian Bancorp 20.81% 5.97% 0.84%

Summary

Meridian Bancorp beats Clifton Bancorp on 11 of the 16 factors compared between the two stocks.

About Clifton Bancorp

Clifton Bancorp Inc, formerly Clifton Savings Bancorp, Inc., is a savings and loan holding company that operates through its subsidiary, Clifton Savings Bank (Clifton Savings). Clifton Savings is a federally chartered savings bank. Clifton Savings operate as a community-oriented financial institution offering traditional financial services to consumers and businesses in the market area. It attracts deposits from the general public and uses those funds to originate one- to four-family, multi-family and commercial real estate, and consumer loans, which it holds for investment. Clifton Savings has one wholly owned subsidiary, Botany Inc., an investment company. In addition to the main office located in Passaic County, Clifton Savings operates 11 branch offices in Bergen and Passaic Counties, which, along with Essex, Morris, Hudson and Union Counties are its primary market area.

About Meridian Bancorp

Meridian Bancorp Inc, formerly Meridian Interstate Bancorp, Inc., is a mid-tier stock holding company of East Boston Savings Bank (the Bank). The Bank is a state-chartered stock savings bank that operates from 24 full-service locations and two loan centers in the Boston metropolitan area. East Boston Savings Bank operates eight of its full-service locations and a loan center under the name Mt. Washington Bank, a division of East Boston Savings Bank. The Bank offers a variety of deposit and loan products to individuals and businesses located in its primary market, which consists of Suffolk, Middlesex and Essex Counties, Massachusetts. The Bank operates as a community-oriented financial institution offering financial services to consumers and businesses. As of December 31, 2011, Meridian Financial Services, Incorporated owned 59.4% interest of the Company.

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