Contrasting Amerant Bancorp (NASDAQ:AMTB) and Alerus Financial (NASDAQ:ALRS)

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

Insider and Institutional Ownership

42.1% of Amerant Bancorp shares are owned by institutional investors. Comparatively, 51.3% of Alerus Financial shares are owned by institutional investors. 7.1% of Amerant Bancorp shares are owned by insiders. Comparatively, 6.1% of Alerus Financial shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Volatility and Risk

Amerant Bancorp has a beta of 1.02, suggesting that its share price is 2% more volatile than the S&P 500. Comparatively, Alerus Financial has a beta of 0.71, suggesting that its share price is 29% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for Amerant Bancorp and Alerus Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Amerant Bancorp	0	2	3	0	2.60
Alerus Financial	0	3	2	0	2.40

Amerant Bancorp presently has a consensus price target of $27.00, indicating a potential upside of 16.76%. Alerus Financial has a consensus price target of $23.40, indicating a potential upside of 8.26%. Given Amerant Bancorp’s stronger consensus rating and higher probable upside, research analysts plainly believe Amerant Bancorp is more favorable than Alerus Financial.

Dividends

Amerant Bancorp pays an annual dividend of $0.36 per share and has a dividend yield of 1.6%. Alerus Financial pays an annual dividend of $0.80 per share and has a dividend yield of 3.7%. Amerant Bancorp pays out -63.2% of its earnings in the form of a dividend. Alerus Financial pays out 78.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Alerus Financial has raised its dividend for 24 consecutive years. Alerus Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares Amerant Bancorp and Alerus Financial”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Amerant Bancorp	$636.08 million	1.53	-$15.75 million	($0.57)	-40.57
Alerus Financial	$336.51 million	1.63	$21.07 million	$1.02	21.19

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Amerant Bancorp	-8.38%	6.36%	0.51%
Alerus Financial	6.26%	7.66%	0.68%

Summary

Alerus Financial beats Amerant Bancorp on 10 of the 17 factors compared between the two stocks.

About Amerant Bancorp

Amerant Bancorp Inc. operates as the bank holding company for Amerant Bank, N.A. that provides banking products and services to individuals and businesses in the United States and internationally. It offers checking, savings, business, and money market accounts; cash management services; and certificates of deposits. The company also provides variable and fixed rate commercial real estate loans; owner-occupied; single-family residential; commercial; and consumer loans and overdrafts, such as automobile, personal, or loans secured by cash or securities and revolving credit card agreements. In addition, it offers trust and estate planning products and services to high-net-worth customers, brokerage and investment advisory services in global capital markets, and wealth management and fiduciary services. Further, the company provides debit and credit cards, night depositories, direct deposits, cashier's checks, safe deposit boxes, letters of credit, and treasury management services, including wire transfer, remote deposit capture, and automated clearinghouse services; derivative instruments; and online and mobile banking, account balances, statements and other documents, online transfers and bill payment, and electronic delivery of customer statements services, as well as automated teller machines, and banking by mobile devices, telephone, and mail. It operates banking centers in Florida and Texas. The company was formerly known as Mercantil Bank Holding Corporation and changed its name to Amerant Bancorp Inc. in June 2019. Amerant Bancorp Inc. was founded in 1979 and is headquartered in Coral Gables, Florida.

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.