Greystone Housing Impact Investors (NYSE:GHI) & Alerus Financial (NASDAQ:ALRS) Critical Analysis

Greystone Housing Impact Investors (NYSE:GHI) and Alerus Financial (NASDAQ:ALRS) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, analyst recommendations, dividends, valuation, risk, profitability and institutional ownership.

Volatility and Risk

Greystone Housing Impact Investors has a beta of 0.7, indicating that its stock price is 30% less volatile than the S&P 500. Comparatively, Alerus Financial has a beta of 0.59, indicating that its stock price is 41% less volatile than the S&P 500.

Institutional & Insider Ownership

9.0% of Greystone Housing Impact Investors shares are owned by institutional investors. Comparatively, 51.3% of Alerus Financial shares are owned by institutional investors. 1.8% of Greystone Housing Impact Investors shares are owned by company insiders. Comparatively, 4.3% of Alerus Financial shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Greystone Housing Impact Investors and Alerus Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Greystone Housing Impact Investors	-5.95%	6.13%	1.17%
Alerus Financial	4.36%	13.18%	1.34%

Dividends

Greystone Housing Impact Investors pays an annual dividend of $0.56 per share and has a dividend yield of 10.9%. Alerus Financial pays an annual dividend of $0.84 per share and has a dividend yield of 3.3%. Greystone Housing Impact Investors pays out -147.4% of its earnings in the form of a dividend. Alerus Financial pays out 127.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Greystone Housing Impact Investors has raised its dividend for 4 consecutive years and Alerus Financial has raised its dividend for 25 consecutive years. Greystone Housing Impact Investors is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares Greystone Housing Impact Investors and Alerus Financial”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Greystone Housing Impact Investors	$85.39 million	1.42	-$7.61 million	($0.38)	-13.58
Alerus Financial	$399.92 million	1.63	$17.44 million	$0.66	38.65

Alerus Financial has higher revenue and earnings than Greystone Housing Impact Investors. Greystone Housing Impact Investors is trading at a lower price-to-earnings ratio than Alerus Financial, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings and price targets for Greystone Housing Impact Investors and Alerus Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Greystone Housing Impact Investors	1	1	1	0	2.00
Alerus Financial	0	6	0	1	2.29

Greystone Housing Impact Investors presently has a consensus price target of $9.50, suggesting a potential upside of 84.14%. Alerus Financial has a consensus price target of $26.00, suggesting a potential upside of 1.92%. Given Greystone Housing Impact Investors’ higher possible upside, equities research analysts plainly believe Greystone Housing Impact Investors is more favorable than Alerus Financial.

Summary

Alerus Financial beats Greystone Housing Impact Investors on 13 of the 18 factors compared between the two stocks.

About Greystone Housing Impact Investors

Greystone Housing Impact Investors LP acquires, holds, sells, and deals in a portfolio of mortgage revenue bonds (MRBs) that are issued to provide construction and/or permanent financing for multifamily, student, and senior citizen housing; skilled nursing properties; and commercial properties in the United States. The company operates in four segments: Affordable Multifamily MRB Investments; Seniors and Skilled Nursing MRB Investments; MF Properties; Market-Rate Joint Venture Investments. It also invests in governmental issuer loans. The company was formerly known as America First Multifamily Investors, L.P. and changed its name to Greystone Housing Impact Investors LP in December 2022. Greystone Housing Impact Investors LP was incorporated in 1998 and is based in Omaha, Nebraska.

About Alerus Financial

Alerus Financial Corporation operates as the bank holding company for Alerus Financial, National Association that engages in the provision of various financial services to businesses and consumers. The company operates in four segments: Banking, Mortgage, Retirement and Benefit Services, and Wealth Management. It offers various deposit products, including demand deposits, interest-bearing transaction accounts, money market accounts, time and savings deposits, checking accounts, 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 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; installment loans and lines of credit; and second mortgage loans. 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, as well as individual retirement accounts; and financial planning, investment management, personal and corporate trust, estate administration, and custody services. Further, the company provides debit and credit cards, online banking, mobile banking/wallet, payment, private banking, payroll accounts, flex spending accounts, administration, and government health insurance program services. It offers banking services in North Dakota, Minnesota, and Arizona; and retirement and benefit plans through offices located in Michigan, Minnesota, and Colorado. 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.