Contrasting Sandy Spring Bancorp (NASDAQ:SASR) and Arrow Financial (NASDAQ:AROW)


Sandy Spring Bancorp (NASDAQ:SASR – Get Rating) and Arrow Financial (NASDAQ:AROW – Get Rating) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, profitability, analyst recommendations, institutional ownership, earnings, risk and valuation.

Volatility and Risk

Sandy Spring Bancorp has a beta of 1.01, suggesting that its stock price is 1% more volatile than the S&P 500. Comparatively, Arrow Financial has a beta of 0.6, suggesting that its stock price is 40% less volatile than the S&P 500.

Earnings and Valuation

This table compares Sandy Spring Bancorp and Arrow Financial’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sandy Spring Bancorp $552.34 million 3.36 $235.11 million $4.36 9.53
Arrow Financial $147.92 million 3.81 $49.86 million $2.97 11.86

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

Profitability

This table compares Sandy Spring Bancorp and Arrow Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sandy Spring Bancorp 36.97% 12.47% 1.45%
Arrow Financial 32.14% 13.24% 1.18%

Dividends

Sandy Spring Bancorp pays an annual dividend of $1.36 per share and has a dividend yield of 3.3%. Arrow Financial pays an annual dividend of $1.08 per share and has a dividend yield of 3.1%. Sandy Spring Bancorp pays out 31.2% of its earnings in the form of a dividend. Arrow Financial pays out 36.4% 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. Sandy Spring Bancorp has increased its dividend for 13 consecutive years and Arrow Financial has increased its dividend for 21 consecutive years. Sandy Spring Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of recent ratings and recommendations for Sandy Spring Bancorp and Arrow Financial, as provided by MarketBeat.

Sell ​​Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sandy Spring Bancorp 0 1 1 0 2.50
Arrow Financial 0 0 0 0 N/A

Sandy Spring Bancorp currently has a consensus target price of $51.50, suggesting a potential upside of 23.92%. Given Sandy Spring Bancorp’s higher possible upside, analysts clearly believe Sandy Spring Bancorp is more favorable than Arrow Financial.

Insider & Institutional Ownership

66.4% of Sandy Spring Bancorp shares are owned by institutional investors. Comparatively, 43.8% of Arrow Financial shares are owned by institutional investors. 3.2% of Sandy Spring Bancorp shares are owned by company insiders. Comparatively, 4.2% of Arrow Financial shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Sandy Spring Bancorp beats Arrow Financial on 11 of the 16 factors compared between the two stocks.

About Sandy Spring Bancorp

(Get Rating)

Sandy Spring Bancorp, Inc. operates as the bank holding company for Sandy Spring Bank that provides commercial and retail banking, mortgage, private banking, and trust services to individuals and businesses. It operates through three segments: Community Banking, Insurance, and Investment Management. The Community Banking segment offers financial products and services, including various loan and deposit products. Its loan products include commercial real estate loans, commercial construction loans, and other commercial loans; residential real estate loans; and consumer loans comprising home equity loans and lines, installment loans, and personal lines of credit. The Insurance segment provides general insurance agency services and annuities, such as commercial, personal, and medical liability lines. The Investment Management segment offers investment management and financial planning, including cash flow analysis, investment review, tax and retirement planning, insurance analysis, and estate planning to individuals, families, small businesses, and associations. It also provides personal trust and wealth management services. The company operates a network of approximately 50 locations in Maryland, Northern Virginia, and Washington DC Sandy Spring Bancorp, Inc. was founded in 1868 and is headquartered in Olney, Maryland.

About Arrow Financial

(Get Rating)

Arrow Financial Corporation, a bank holding company, provides commercial and consumer banking, and financial products and services. The company’s deposit products include demand deposits, interest-bearing checking accounts, savings deposits, time deposits, and other time deposits. Its lending activities include commercial loans, such as term loans, time notes, and lines of credit; and commercial real estate loans to finance real estate purchases, refinancing, expansions, and improvements to commercial properties, as well as commercial construction and land development loans to finance projects. The company’s lending activities also include consumer installment loans to finance personal expenditures, personal lines of credit, overdraft protection, and automobile loans; and residential real estate loans, fixed home equity loans, and home equity lines of credit for consumers to finance home improvements, debt consolidation, education, and other uses. In addition, it maintains an indirect lending program; and sells residential real estate loan originations into the secondary market. Further, the company provides retirement planning, trust, and estate administration services for individuals; and pension, profit-sharing, and employee benefit plan administration services for corporations. Additionally, it offers insurance agency services comprising group health care policies and life insurance, and property and casualty insurance products; and investment advisory services to its proprietary mutual funds, as well as holds a real estate investment trust. The company operates in the northeastern region of New York State in Warren, Washington, Saratoga, Essex, Clinton, Rensselaer, Albany, and Schenectady counties, as well as surrounding areas. It owns 26 branch banking offices; and leases 12 branch banking offices, as well as two residential loan origination offices. Arrow Financial Corporation was founded in 1851 and is headquartered in Glens Falls, New York.



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