Sandy Spring Bancorp (SASR) and Bryn Mawr Bank (BMTC) Critical Review

Sandy Spring Bancorp (NASDAQ: SASR) and Bryn Mawr Bank (NASDAQ:BMTC) are both small-cap financials companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, dividends, valuation, analyst recommendations, institutional ownership, risk and profitability.

Analyst Recommendations

This is a breakdown of current recommendations for Sandy Spring Bancorp and Bryn Mawr Bank, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sandy Spring Bancorp 0 3 2 0 2.40
Bryn Mawr Bank 0 0 2 0 3.00

Sandy Spring Bancorp currently has a consensus price target of $44.75, suggesting a potential upside of 13.64%. Bryn Mawr Bank has a consensus price target of $48.50, suggesting a potential upside of 6.95%. Given Sandy Spring Bancorp’s higher possible upside, research analysts clearly believe Sandy Spring Bancorp is more favorable than Bryn Mawr Bank.

Profitability

This table compares Sandy Spring Bancorp and Bryn Mawr Bank’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sandy Spring Bancorp 24.86% 9.86% 1.03%
Bryn Mawr Bank 12.20% 10.53% 1.22%

Dividends

Sandy Spring Bancorp pays an annual dividend of $1.04 per share and has a dividend yield of 2.6%. Bryn Mawr Bank pays an annual dividend of $0.88 per share and has a dividend yield of 1.9%. Sandy Spring Bancorp pays out 47.3% of its earnings in the form of a dividend. Bryn Mawr Bank pays out 39.8% 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.

Volatility & Risk

Sandy Spring Bancorp has a beta of 0.93, indicating that its share price is 7% less volatile than the S&P 500. Comparatively, Bryn Mawr Bank has a beta of 0.59, indicating that its share price is 41% less volatile than the S&P 500.

Insider and Institutional Ownership

71.0% of Sandy Spring Bancorp shares are held by institutional investors. Comparatively, 69.8% of Bryn Mawr Bank shares are held by institutional investors. 2.6% of Sandy Spring Bancorp shares are held by insiders. Comparatively, 2.3% of Bryn Mawr Bank shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Sandy Spring Bancorp and Bryn Mawr Bank’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sandy Spring Bancorp $246.04 million 3.84 $53.21 million $2.20 17.90
Bryn Mawr Bank $188.69 million 4.85 $23.02 million $2.21 20.52

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

Summary

Sandy Spring Bancorp beats Bryn Mawr Bank on 8 of the 15 factors compared between the two stocks.

Sandy Spring Bancorp Company Profile

Sandy Spring Bancorp, Inc. is the bank holding company for Sandy Spring Bank (the Bank). The Company operates through three segments: Community Banking, Insurance and Investment Management. The Company’s Community Banking segment operates through Sandy Spring Bank and involves delivering a range of financial products and services, including various loan and deposit products to both individuals and businesses. The Insurance segment operates through Sandy Spring Insurance Corporation, a subsidiary of the Bank, and offers annuities as an alternative to traditional deposit accounts. The Investment Management segment operates through West Financial Services, Inc., a subsidiary of the Bank, which provides investment management and financial planning services. As of December 31, 2016, the Bank conducted commercial banking business through 44 community offices and six financial centers located in Central Maryland, Northern Virginia and Washington D.C.

Bryn Mawr Bank Company Profile

Bryn Mawr Bank Corporation is the bank holding company of the Bryn Mawr Trust Company (the Bank). The Company and its subsidiaries offer a range of personal and business banking services, consumer and commercial loans, equipment leasing, mortgages, insurance and wealth management services, including investment management, trust and estate administration, retirement planning, custody services, and tax planning and preparation from various location across Montgomery, Delaware, Chester, Philadelphia and Dauphin counties of Pennsylvania, and New Castle county in Delaware. The Company’s segments include Banking and Wealth Management. The Banking segment consists of commercial and retail banking. The Wealth Management segment’s activities include trust administration, other related fiduciary services, custody, investment management and advisory services, employee benefits and individual retirement accounts (IRA) administration, estate settlement, tax services and brokerage.

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