Trustmark (NASDAQ:TRMK) vs. Meridian Bancorp (NASDAQ:EBSB) Critical Survey

Trustmark (NASDAQ:TRMK) and Meridian Bancorp (NASDAQ:EBSB) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, dividends, risk, profitability, institutional ownership, valuation and analyst recommendations.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Trustmark and Meridian Bancorp, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Trustmark 2 2 0 0 1.50
Meridian Bancorp 0 1 1 0 2.50

Trustmark presently has a consensus target price of $32.33, suggesting a potential downside of 3.51%. Meridian Bancorp has a consensus target price of $17.50, suggesting a potential downside of 3.31%. Given Meridian Bancorp’s stronger consensus rating and higher probable upside, analysts clearly believe Meridian Bancorp is more favorable than Trustmark.

Profitability

This table compares Trustmark and Meridian Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Trustmark 21.20% 9.28% 1.10%
Meridian Bancorp 22.96% 8.77% 0.97%

Valuation & Earnings

This table compares Trustmark and Meridian Bancorp’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Trustmark $683.25 million 3.16 $149.58 million $2.21 15.16
Meridian Bancorp $236.68 million 4.08 $55.77 million $1.06 17.08

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

Dividends

Trustmark pays an annual dividend of $0.92 per share and has a dividend yield of 2.7%. Meridian Bancorp pays an annual dividend of $0.28 per share and has a dividend yield of 1.5%. Trustmark pays out 41.6% of its earnings in the form of a dividend. Meridian Bancorp pays out 26.4% 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. Meridian Bancorp has increased its dividend for 3 consecutive years.

Institutional and Insider Ownership

66.7% of Trustmark shares are held by institutional investors. Comparatively, 65.7% of Meridian Bancorp shares are held by institutional investors. 1.5% of Trustmark shares are held by company insiders. Comparatively, 4.8% of Meridian Bancorp shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Volatility & Risk

Trustmark has a beta of 1.1, meaning that its share price is 10% more volatile than the S&P 500. Comparatively, Meridian Bancorp has a beta of 0.55, meaning that its share price is 45% less volatile than the S&P 500.

Summary

Meridian Bancorp beats Trustmark on 9 of the 17 factors compared between the two stocks.

About Trustmark

Trustmark Corporation operates as the bank holding company for Trustmark National Bank that provides banking and other financial solutions to individuals and corporate institutions in the United States. The company offers checking, savings, and money market accounts; individual retirement accounts; certificates of deposits; financing for commercial and industrial projects, income producing commercial real estate, owner-occupied real estate, and construction and land development; and installment and real estate loans, and lines of credit. It also provides mortgage banking services, including construction financing, production of conventional and government insured mortgages, and secondary marketing and mortgage servicing; overdraft facilities; and treasury management services. In addition, the company offers business insurance products and services for medical professionals, construction, manufacturing, hospitality, real estate, and group life and health plans; and life and health insurance, and personal line policies for individual customers, as well as provides an intermediary vehicle for the provision of loans or investments in low-income communities. Further, it engages in the administration of personal trusts and estates; management of investment accounts for individuals, employee benefit plans, and charitable foundations; and provision of corporate trust and institutional custody, securities brokerage, financial and estate planning, retirement plan, and investment management services. As of December 31, 2018, the company operated 181 full-service branches and 14 limited-service branches; 178 ATMs and 4 interactive teller machines (ITMs) at on-premise locations; and 61 ATMs and 3 ITMs at off-premise locations. Trustmark Corporation was founded in 1889 and is headquartered in Jackson, Mississippi.

About Meridian Bancorp

Meridian Bancorp, Inc. operates as the holding company for East Boston Savings Bank that provides various financial products and services for individuals and businesses primarily in Suffolk, Norfolk, Middlesex and Essex Counties, Massachusetts. The company accepts various deposit products, including non-interest-bearing demand deposits, such as checking accounts; interest-bearing demand accounts comprising NOW and money market accounts; savings accounts; and certificates of deposits, as well as commercial checking accounts. Its loan portfolio includes commercial real estate loans, which are secured by properties used for business purposes, such as office buildings, industrial facilities, and retail facilities; one- to four-family residential loans comprising mortgage loans that enable borrowers to purchase or refinance existing homes; multi-family real estate loans; construction loans; commercial and industrial loans; home equity lines of credit; and consumer loans that include automobile loans, loans secured by savings or certificate accounts, credit builders, and annuity and overdraft loans. In addition, the company offers non-deposit financial products, which comprise mutual funds, annuities, stocks, and bonds through a third-party broker-dealer; and long-term care insurance products. Further, it is also involved in the securities transactions business; and holding foreclosed real estate properties. The company operates 37 full-service locations, as well as 1 mobile branch and 3 loan centers. Meridian Bancorp, Inc. was founded in 1848 and is headquartered in Peabody, Massachusetts.

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