Prime Meridian (OTCMKTS:PMHG) versus Madison County Financial (OTCMKTS:MCBK) Critical Analysis

Profitability

This table compares Madison County Financial and Prime Meridian’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Madison County Financial	N/A	N/A	N/A
Prime Meridian	15.49%	9.27%	0.87%

Risk and Volatility

Madison County Financial has a beta of 0.12, indicating that its stock price is 88% less volatile than the S&P 500. Comparatively, Prime Meridian has a beta of 0.06, indicating that its stock price is 94% less volatile than the S&P 500.

Insider and Institutional Ownership

11.8% of Prime Meridian shares are held by institutional investors. 16.9% of Madison County Financial shares are held by insiders. Comparatively, 25.9% of Prime Meridian shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Madison County Financial and Prime Meridian”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Madison County Financial	$29.54 million	2.38	$3.82 million	$1.03	25.53
Prime Meridian	$50.36 million	3.81	$8.49 million	$2.48	22.86

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

Dividends

Madison County Financial pays an annual dividend of $0.36 per share and has a dividend yield of 1.4%. Prime Meridian pays an annual dividend of $1.00 per share and has a dividend yield of 1.8%. Madison County Financial pays out 35.0% of its earnings in the form of a dividend. Prime Meridian pays out 40.3% 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.

Summary

Prime Meridian beats Madison County Financial on 10 of the 13 factors compared between the two stocks.

About Madison County Financial

Madison County Financial, Inc. operates as the holding company for Madison County Bank that provides banking and financial services to individual and corporate customers in Nebraska, the United States. It offers checking, money market savings, savings, and individual retirement accounts; certificates of deposit; credit and debit cards; home loans; and consumer loans, including home equity lines of credit, second mortgage, home improvement, recreational vehicle, personal, and overdraft protection loans, as well as loans for automobiles, trucks, and vans. The company also provides agricultural real estate, machinery and equipment, livestock and crop, and operating loans; and commercial real estate, construction, investment property, and working capital loans, as well as equipment financing services. In addition, it offers online and mobile banking, and merchant services. The company was formerly known as Madison County Holding Company and changed its name to Madison County Financial, Inc. in October 2012. Madison County Financial, Inc. was founded in 1888 and is headquartered in Madison, Nebraska.

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.