Analyzing First Western Financial (NASDAQ:MYFW) and Prime Meridian (OTCMKTS:PMHG)

First Western Financial (NASDAQ:MYFW) and Prime Meridian (OTCMKTS:PMHG) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, earnings, risk, dividends, analyst recommendations, institutional ownership and valuation.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for First Western Financial and Prime Meridian, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Western Financial	0	1	2	0	2.67
Prime Meridian	0	0	0	0	0.00

First Western Financial presently has a consensus target price of $23.33, suggesting a potential upside of 13.65%. Given First Western Financial’s stronger consensus rating and higher possible upside, research analysts plainly believe First Western Financial is more favorable than Prime Meridian.

Valuation & Earnings

This table compares First Western Financial and Prime Meridian”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Western Financial	$180.33 million	1.10	$8.47 million	$0.87	23.60
Prime Meridian	$50.36 million	1.87	$8.49 million	$2.56	11.05

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

Institutional and Insider Ownership

60.3% of First Western Financial shares are held by institutional investors. Comparatively, 11.8% of Prime Meridian shares are held by institutional investors. 17.9% of First Western Financial shares are held by company insiders. Comparatively, 25.9% of Prime Meridian shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Volatility and Risk

First Western Financial has a beta of 0.69, suggesting that its share price is 31% less volatile than the S&P 500. Comparatively, Prime Meridian has a beta of 0.51, suggesting that its share price is 49% less volatile than the S&P 500.

Profitability

This table compares First Western Financial and Prime Meridian’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Western Financial	4.70%	3.43%	0.29%
Prime Meridian	16.86%	10.05%	0.95%

About First Western Financial

First Western Financial, Inc., a financial holding company, provides wealth advisory, private baking, personal trust, investment management, mortgage lending, and institutional asset management services. The company operates through two segments: Wealth Management and Mortgage. The Wealth Management segment provides deposit, loan, life insurance, and trust and investment management advisory products and services. The Mortgage segment engages in soliciting, originating, and selling mortgage loans into the secondary market. It serves entrepreneurs, professionals, high net worth individuals or families, and business and philanthropic organizations. First Western Financial, Inc. was incorporated in 2002 and is headquartered in Denver, Colorado.

About Prime Meridian

Prime Meridian Holding Company operates as the bank holding company for Prime Meridian Bank that provides various consumer and commercial banking services to individuals and businesses. The company accepts various deposits, such as checking, money market, savings, term certificate of deposit, demand interest-bearing and noninterest-bearing, health savings, NOW, and escrow accounts, as well as retirement savings plans and time deposits. Its loan products include commercial real estate, residential real estate and home equity, small business administration, construction, equipment, and commercial loans; and consumer and other loans comprising financing of automobiles, boats, and recreational vehicles, as well as issues standby letters and business lines of credit. The company also offers debit and credit cards; mobile banking, remote and mobile deposit, Apple Pay, bank-to-bank transfer, and online banking services; and safe deposit, wire transfer, foreign exchange, direct deposits, notary, night depository, official checks, domestic collections, bank drafts, automated teller services, drive-in tellers, merchant card, and banking by mail services, as well as invests in securities. Prime Meridian Holding Company was founded in 2008 and is headquartered in Tallahassee, Florida.