Financial Review: Alerus Financial (ALRS) and Its Competitors

Alerus Financial (NASDAQ: ALRS) is one of 159 publicly-traded companies in the “National commercial banks” industry, but how does it weigh in compared to its peers? We will compare Alerus Financial to similar companies based on the strength of its analyst recommendations, dividends, earnings, valuation, institutional ownership, profitability and risk.

Dividends

Alerus Financial pays an annual dividend of $0.60 per share and has a dividend yield of 3.1%. Alerus Financial pays out 31.4% of its earnings in the form of a dividend. As a group, “National commercial banks” companies pay a dividend yield of 3.8% and pay out 30.9% of their earnings in the form of a dividend. Alerus Financial has raised its dividend for 1 consecutive years. Alerus Financial lags its peers as a dividend stock, given its lower dividend yield and higher payout ratio.

Valuation and Earnings

This table compares Alerus Financial and its peers gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Alerus Financial $207.49 million $29.54 million 10.24
Alerus Financial Competitors $7.71 billion $1.61 billion 8.01

Alerus Financial’s peers have higher revenue and earnings than Alerus Financial. Alerus Financial is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Alerus Financial and its peers, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Alerus Financial 0 1 0 0 2.00
Alerus Financial Competitors 2703 7649 6178 322 2.24

Alerus Financial presently has a consensus target price of $21.00, suggesting a potential upside of 7.36%. As a group, “National commercial banks” companies have a potential upside of 31.13%. Given Alerus Financial’s peers stronger consensus rating and higher possible upside, analysts plainly believe Alerus Financial has less favorable growth aspects than its peers.

Profitability

This table compares Alerus Financial and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Alerus Financial 14.07% 10.83% 1.27%
Alerus Financial Competitors 15.37% 8.28% 0.89%

Insider & Institutional Ownership

35.9% of Alerus Financial shares are held by institutional investors. Comparatively, 50.5% of shares of all “National commercial banks” companies are held by institutional investors. 8.3% of Alerus Financial shares are held by insiders. Comparatively, 9.5% of shares of all “National commercial banks” companies 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

Alerus Financial peers beat Alerus Financial on 11 of the 14 factors compared.

Alerus Financial Company Profile

Alerus Financial Corporation, through its subsidiary Alerus Financial, National Association, provides various financial services to businesses and consumers in the United States. The company operates through four segments: Banking, Retirement and Benefit Services, Wealth Management, and Mortgage. It offers various deposit products and services, including demand deposits, checking, interest-bearing transaction accounts, money market accounts, time and savings deposits, and certificates of deposit; and treasury management products, including electronic receivables management, remote deposit capture, cash vault services, merchant services, and other cash management services. The company also provides commercial lending products, such as commercial loans, business term loans, lines of credit, and commercial real estate loans, as well as construction and land development loans; consumer lending products, including residential first mortgage loans; and installment loans and lines of credit. In addition, it offers retirement plan administration and investment advisory services, employee stock ownership plan, fiduciary services, payroll, health savings accounts, and other benefit services; and wealth management services, such as financial planning, investment management, personal and corporate trust services, estate administration, and custody services. Further, the company provides debit and credit cards, online banking, mobile banking/wallet, private banking, payroll accounts, flex spending accounts, administration, and government health insurance program services. The company was formerly known as First National Bank North Dakota and changed its name to Alerus Financial Corporation in 2000. Alerus Financial Corporation was founded in 1879 and is headquartered in Grand Forks, North Dakota.

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