Critical Survey: SHF (NASDAQ:SHFS) & Alerus Financial (NASDAQ:ALRS)

SHF (NASDAQ:SHFS) and Alerus Financial (NASDAQ:ALRS) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, earnings, analyst recommendations, risk and profitability.

Earnings & Valuation

This table compares SHF and Alerus Financial”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SHF	$7.67 million	0.23	-$2.16 million	($0.96)	-0.40
Alerus Financial	$227.51 million	3.20	$17.44 million	$1.03	28.11

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

Analyst Ratings

This is a summary of recent recommendations for SHF and Alerus Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SHF	1	0	0	0	1.00
Alerus Financial	0	4	1	2	2.71

Alerus Financial has a consensus target price of $28.38, suggesting a potential downside of 1.99%. Given Alerus Financial’s stronger consensus rating and higher probable upside, analysts plainly believe Alerus Financial is more favorable than SHF.

Profitability

This table compares SHF and Alerus Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SHF	-40.35%	-561.02%	-43.79%
Alerus Financial	6.74%	14.39%	1.51%

Insider and Institutional Ownership

29.2% of SHF shares are owned by institutional investors. Comparatively, 51.3% of Alerus Financial shares are owned by institutional investors. 5.8% of SHF shares are owned by insiders. Comparatively, 4.3% of Alerus Financial shares are owned 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.

Volatility and Risk

SHF has a beta of 0.72, meaning that its share price is 28% less volatile than the S&P 500. Comparatively, Alerus Financial has a beta of 0.69, meaning that its share price is 31% less volatile than the S&P 500.

Summary

Alerus Financial beats SHF on 13 of the 15 factors compared between the two stocks.

About SHF

SHF Holdings, Inc., through its subsidiaries, provides access to banking, lending, and other financial services to financial institutions serving the cannabis industry. The company, through its proprietary platform, offers access to business checking and savings accounts, cash management accounts, savings and investment options, commercial lending, courier services, remote deposit services, automated clearing house payments and origination, and wire payments. Its services allow cannabis related businesses to obtain services from financial institutions that allow them to run their business with enhanced financial insight into their business and access to resources. The company was founded in 2015 and is based in Golden, Colorado. SHF Holdings, Inc. operates as a subsidiary of Partner Colorado Credit Union.

About Alerus Financial

Alerus Financial Corporation operates as the bank holding company for Alerus Financial, National Association that engages in the provision of various financial services to businesses and consumers. The company operates in four segments: Banking, Mortgage, Retirement and Benefit Services, and Wealth Management. It offers various deposit products, including demand deposits, interest-bearing transaction accounts, money market accounts, time and savings deposits, checking accounts, and certificates of deposit; and treasury management products, including electronic receivables management, remote deposit capture, cash vault services, merchant services, and other cash management services. The company also provides commercial loans, business term loans, lines of credit, and commercial real estate loans, as well as construction and land development loans; consumer lending products, including residential first mortgage loans; installment loans and lines of credit; and second mortgage loans. In addition, it offers retirement plan administration and investment advisory services, employee stock ownership plan, fiduciary services, payroll, health savings accounts, and other benefit services, as well as individual retirement accounts; and financial planning, investment management, personal and corporate trust, estate administration, and custody services. Further, the company provides debit and credit cards, online banking, mobile banking/wallet, payment, private banking, payroll accounts, flex spending accounts, administration, and government health insurance program services. It offers banking services in North Dakota, Minnesota, and Arizona; and retirement and benefit plans through offices located in Michigan, Minnesota, and Colorado. The company was formerly known as First National Bank North Dakota and changed its name to Alerus Financial Corporation in 2000. Alerus Financial Corporation was founded in 1879 and is headquartered in Grand Forks, North Dakota.