Critical Contrast: VersaBank (NASDAQ:VBNK) versus Primis Financial (NASDAQ:FRST)

Primis Financial (NASDAQ:FRST) and VersaBank (NASDAQ:VBNK) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their dividends, analyst recommendations, risk, profitability, institutional ownership, valuation and earnings.

Earnings and Valuation

This table compares Primis Financial and VersaBank”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Primis Financial	$277.00 million	1.32	$61.44 million	$2.23	6.61
VersaBank	$217.14 million	3.60	$20.32 million	$0.76	31.61

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

Profitability

This table compares Primis Financial and VersaBank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Primis Financial	19.27%	5.77%	0.59%
VersaBank	9.92%	8.66%	0.75%

Analyst Recommendations

This is a breakdown of current recommendations for Primis Financial and VersaBank, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Primis Financial	1	0	2	1	2.75
VersaBank	0	1	3	0	2.75

Primis Financial presently has a consensus price target of $17.50, suggesting a potential upside of 18.72%. VersaBank has a consensus price target of $24.00, suggesting a potential downside of 0.08%. Given Primis Financial’s higher probable upside, research analysts clearly believe Primis Financial is more favorable than VersaBank.

Insider & Institutional Ownership

75.0% of Primis Financial shares are held by institutional investors. Comparatively, 56.9% of VersaBank shares are held by institutional investors. 10.9% of Primis Financial shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Volatility & Risk

Primis Financial has a beta of 0.74, meaning that its share price is 26% less volatile than the S&P 500. Comparatively, VersaBank has a beta of 1.03, meaning that its share price is 3% more volatile than the S&P 500.

Dividends

Primis Financial pays an annual dividend of $0.40 per share and has a dividend yield of 2.7%. VersaBank pays an annual dividend of $0.07 per share and has a dividend yield of 0.3%. Primis Financial pays out 17.9% of its earnings in the form of a dividend. VersaBank pays out 9.2% 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.

Summary

Primis Financial beats VersaBank on 9 of the 16 factors compared between the two stocks.

About Primis Financial

Primis Financial Corp. is a bank holding company headquartered in Glen Allen, Virginia. Its principal subsidiary, Primis Bank, provides banking and financial services to individuals, families, businesses and nonprofit organizations. Primis Bank offers deposit products, residential and commercial real estate loans, consumer lending, business loans, treasury and cash-management services, mortgage banking and online and mobile banking. The bank also provides services designed to support small and middle-market businesses, including commercial lending and payment solutions.

About VersaBank

VersaBank is a federally chartered Canadian bank that uses a digital-first model to provide banking and lending services, primarily through partnerships with financial institutions and other businesses rather than a traditional branch network. Headquartered in London, Ontario, the bank serves customers in Canada and has expanded its operations into the United States. Its activities include accepting deposits and providing commercial financing. Through its Receivable Purchase Program, VersaBank purchases portfolios of consumer financing receivables from lenders and businesses, helping those partners free up capital to support further lending.