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