Primis Financial (NASDAQ:FRST) & Merchants Bancorp (NASDAQ:MBIN) Critical Comparison

Primis Financial (NASDAQ:FRST) and Merchants Bancorp (NASDAQ:MBIN) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, valuation, earnings, profitability, risk, analyst recommendations and dividends.

Risk and Volatility

Primis Financial has a beta of 0.75, suggesting that its share price is 25% less volatile than the S&P 500. Comparatively, Merchants Bancorp has a beta of 1.12, suggesting that its share price is 12% more volatile than the S&P 500.

Dividends

Primis Financial pays an annual dividend of $0.40 per share and has a dividend yield of 3.3%. Merchants Bancorp pays an annual dividend of $0.36 per share and has a dividend yield of 0.9%. Merchants Bancorp pays out 6.0% of its earnings in the form of a dividend.

Profitability

This table compares Primis Financial and Merchants Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Primis Financial	7.31%	4.63%	0.47%
Merchants Bancorp	21.33%	22.36%	1.69%

Analyst Recommendations

This is a summary of current ratings for Primis Financial and Merchants Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Primis Financial	0	0	1	0	3.00
Merchants Bancorp	0	1	2	0	2.67

Primis Financial currently has a consensus target price of $14.00, suggesting a potential upside of 15.13%. Merchants Bancorp has a consensus target price of $52.33, suggesting a potential upside of 30.21%. Given Merchants Bancorp’s higher possible upside, analysts plainly believe Merchants Bancorp is more favorable than Primis Financial.

Valuation & Earnings

This table compares Primis Financial and Merchants Bancorp”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Primis Financial	$244.23 million	1.23	-$7.83 million	N/A	N/A
Merchants Bancorp	$1.19 billion	1.54	$279.23 million	$6.04	6.65

Merchants Bancorp has higher revenue and earnings than Primis Financial.

Insider and Institutional Ownership

75.0% of Primis Financial shares are held by institutional investors. Comparatively, 24.6% of Merchants Bancorp shares are held by institutional investors. 11.1% of Primis Financial shares are held by insiders. Comparatively, 39.7% of Merchants Bancorp shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Merchants Bancorp beats Primis Financial on 10 of the 15 factors compared between the two stocks.

About Primis Financial

Primis Financial Corp. operates as the bank holding company for Primis Bank that provides a range of financial services to individuals and small and medium sized businesses in the United States. Its deposit products include checking, NOW, savings, and money market accounts, as well as certificates of deposits. The company also provides commercial business and real estate, construction, secured asset based, small business administration, mortgage warehouse lending products, as well as financing for medical, dental, and veterinary businesses; residential mortgage, trust mortgage, home equity lines of credit, secured and unsecured personal, and consumer loans, as well as life insurance premium financing and demand loans. It also offers cash management services comprising investment/sweep, zero balance, and controlled disbursement accounts; and wire transfer, employer/payroll processing, night depository, depository transfer, merchant, ACH origination, and remote deposit capture services. In addition, the company provides debit cards, ATM services, notary services, and mobile and online banking. It operates full-service branches in Virginia and Maryland. The company was formerly known as Southern National Bancorp of Virginia, Inc. and changed its name to Primis Financial Corp. Primis Financial Corp. was founded in 2004 and is based in McLean, Virginia.

About Merchants Bancorp

Merchants Bancorp operates as the diversified bank holding company in the United States. It operates through three segments: Multi-family Mortgage Banking, Mortgage Warehousing, and Banking. The Multi-family Mortgage Banking segment engages in the mortgage banking, which originates and services government sponsored mortgages, including bridge financing products to refinance, acquire, or reposition multi-family housing projects, and construction lending for multi-family and healthcare facilities. This segment also offers customized loan products for need-based skilled nursing facilities, such as independent living, assisted living, and memory care; and tax credit equity syndicator service. The Mortgage Warehousing segment funds agency eligible residential loans, as well as commercial loans to non-depository financial institutions. The Banking segment offers a range of financial products and services to consumers and businesses, which includes retail banking, commercial lending, agricultural lending, retail and correspondent residential mortgage banking, and small business administration lending. Merchants Bancorp was founded in 1990 and is headquartered in Carmel, Indiana.