Reliant Bancorp (NASDAQ:RBNC) and Merchants Bancorp (NASDAQ:MBIN) are both small-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, profitability, dividends, earnings, analyst recommendations, valuation and risk.

Earnings and Valuation

This table compares Reliant Bancorp and Merchants Bancorp’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Reliant Bancorp $46.17 million 5.74 $7.24 million $1.05 21.90
Merchants Bancorp $142.07 million 4.19 $54.68 million $1.97 10.53

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

Profitability

This table compares Reliant Bancorp and Merchants Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Reliant Bancorp 15.62% 7.57% 0.93%
Merchants Bancorp 38.21% 17.63% 1.66%

Risk & Volatility

Reliant Bancorp has a beta of 0.4, indicating that its share price is 60% less volatile than the S&P 500. Comparatively, Merchants Bancorp has a beta of 1.19, indicating that its share price is 19% more volatile than the S&P 500.

Insider & Institutional Ownership

29.3% of Reliant Bancorp shares are held by institutional investors. Comparatively, 22.4% of Merchants Bancorp shares are held by institutional investors. 13.1% of Reliant Bancorp shares are held by insiders. Comparatively, 43.4% of Merchants Bancorp shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

Reliant Bancorp pays an annual dividend of $0.36 per share and has a dividend yield of 1.6%. Merchants Bancorp pays an annual dividend of $0.24 per share and has a dividend yield of 1.2%. Reliant Bancorp pays out 34.3% of its earnings in the form of a dividend. Merchants Bancorp pays out 12.2% 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.

Analyst Recommendations

This is a summary of recent recommendations for Reliant Bancorp and Merchants Bancorp, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Reliant Bancorp 0 1 1 0 2.50
Merchants Bancorp 0 1 1 0 2.50

Reliant Bancorp presently has a consensus target price of $27.50, indicating a potential upside of 19.57%. Merchants Bancorp has a consensus target price of $21.00, indicating a potential upside of 1.20%. Given Reliant Bancorp’s higher possible upside, research analysts clearly believe Reliant Bancorp is more favorable than Merchants Bancorp.

Summary

Merchants Bancorp beats Reliant Bancorp on 9 of the 14 factors compared between the two stocks.

About Reliant Bancorp

Reliant Bancorp, Inc. operates as the holding company for Reliant Bank that provides a range of commercial banking services for businesses and individuals in the Middle Tennessee region and the Nashville-Davidson-Murfreesboro-Franklin Metropolitan Statistical Area. Its deposit products include checking, savings, and money market deposit accounts; time deposits; certificates of deposit; and non-interest-bearing and interest bearing demand deposits. The company's loan portfolio comprises residential mortgage loans and mortgage refinancing; commercial, industrial, and agricultural loans; multi-family and commercial real estate loans; construction, land development, and farmland loans; 1-4 family residential real estate loans; home equity loans; and consumer loans, such as loans for household, family, and other personal expenditures. It also provides safe deposit box, debit card, direct deposit, and official bank check services. The company operates through seven branches in Davidson, Robertson, Sumner, and Williamson counties in Tennessee. The company was formerly known as Commerce Union Bancshares, Inc. and changed its name to Reliant Bancorp, Inc. in January 2018. Reliant Bancorp, Inc. was founded in 2006 and is based in Brentwood, Tennessee.

About Merchants Bancorp

Merchants Bancorp operates as a diversified bank holding company in the United States. It operates in three segments: Multi-family Mortgage Banking, Mortgage Warehousing, and Banking. The Multi-family Mortgage Banking segment originates and services government sponsored mortgages for multi-family and healthcare facilities. The Mortgage Warehousing segment funds agency eligible residential loans, including origination, purchase, and sale in the secondary market, as well as commercial loans to non-depository financial institutions. The Banking segment offers a range of financial products and services to consumers and businesses, such as various types of deposit products comprising checking, savings, and time deposit accounts; commercial, commercial real estate, mortgage, and other consumer loan products; and letters of credit, as well as engages in the retail banking, agricultural lending, single family mortgage lending, small business administration lending, and correspondent lending and servicing businesses. The company operates seven branches comprising three branches in the Indianapolis, Indiana metropolitan area; two branches in Lynn, Indiana; and two branches in Joy and New Boston, Illinois. Merchants Bancorp was founded in 1990 and is headquartered in Carmel, Indiana.

Receive News & Ratings for Reliant Bancorp Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Reliant Bancorp and related companies with MarketBeat.com's FREE daily email newsletter.