Reviewing Meta Financial Group (NASDAQ:CASH) and Sterling Bancorp (NASDAQ:SBT)

Meta Financial Group (NASDAQ:CASH) and Sterling Bancorp (NASDAQ:SBT) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, earnings, institutional ownership and dividends.

Risk & Volatility

Meta Financial Group has a beta of 1.26, suggesting that its stock price is 26% more volatile than the S&P 500. Comparatively, Sterling Bancorp has a beta of 1.34, suggesting that its stock price is 34% more volatile than the S&P 500.

Dividends

Meta Financial Group pays an annual dividend of $0.20 per share and has a dividend yield of 0.6%. Sterling Bancorp pays an annual dividend of $0.04 per share and has a dividend yield of 0.4%. Meta Financial Group pays out 7.1% of its earnings in the form of a dividend. Sterling Bancorp pays out 3.3% 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.

Profitability

This table compares Meta Financial Group and Sterling Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Meta Financial Group 16.57% 11.64% 1.52%
Sterling Bancorp 32.19% 18.23% 1.88%

Earnings and Valuation

This table compares Meta Financial Group and Sterling Bancorp’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Meta Financial Group $343.06 million 3.93 $51.62 million $2.81 12.66
Sterling Bancorp $183.81 million 2.75 $63.47 million $1.20 8.33

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

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Meta Financial Group and Sterling Bancorp, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Meta Financial Group 0 0 2 0 3.00
Sterling Bancorp 0 0 2 0 3.00

Meta Financial Group currently has a consensus price target of $38.50, suggesting a potential upside of 8.24%. Sterling Bancorp has a consensus price target of $13.50, suggesting a potential upside of 35.14%. Given Sterling Bancorp’s higher possible upside, analysts plainly believe Sterling Bancorp is more favorable than Meta Financial Group.

Institutional & Insider Ownership

75.3% of Meta Financial Group shares are owned by institutional investors. Comparatively, 28.3% of Sterling Bancorp shares are owned by institutional investors. 7.7% of Meta Financial Group shares are owned by insiders. Comparatively, 3.0% of Sterling Bancorp shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

About Meta Financial Group

Meta Financial Group, Inc. operates as the holding company for MetaBank that offers various banking products and services in the United States. The company accepts various deposit products, including statement savings accounts, money market savings accounts, negotiable order of withdrawal accounts, and checking accounts; and deposits related to prepaid cards, which primarily comprise checking accounts and certificate accounts. It also provides loans, such as commercial finance loans, commercial and multi-family real estate loans, one-to-four family mortgage loans, consumer finance loans, taxpayer advance loans, agriculture loans, consumer and commercial operating loans, and commercial insurance premium finance products. In addition, the company issues prepaid cards and consumer credit products; sponsors automated teller machines into various debit networks; and offers tax refund transfer and other payment industry products and services. It operates 10 full-service branch offices in Storm Lake and Des Moines, Iowa; and Brookings and Sioux Falls, South Dakota, as well as 17 non-branch offices located in South Dakota, Texas, California, Kentucky, Pennsylvania, Florida, Louisiana, Tennessee, Michigan, and Canada. The company was founded in 1954 and is headquartered in Sioux Falls, South Dakota.

About Sterling Bancorp

Sterling Bancorp, Inc. is a unitary thrift holding company. Its wholly owned subsidiary, Sterling Bank and Trust, F.S.B., has primary branch operations in San Francisco and Los Angeles, California and New York City, and a loan production office in Seattle, Washington. Sterling offers a broad range of loan products to the residential and commercial markets, as well as retail and business banking services. Sterling also has an operations center and a branch in Southfield, Michigan. Sterling was named as the top performing community bank in the United States with total assets between $1 billion and $10 billion in 2017 by SNL/S&P Global Market Intelligence.

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