Critical Analysis: Farmers & Merchants Bancorp (NASDAQ:FMAO) vs. FFBW (NASDAQ:FFBW)

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

Earnings & Valuation

This table compares Farmers & Merchants Bancorp and FFBW”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Farmers & Merchants Bancorp	$155.85 million	2.90	$22.79 million	$1.70	19.41
FFBW	$16.54 million	4.13	$1.51 million	N/A	N/A

Farmers & Merchants Bancorp has higher revenue and earnings than FFBW.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Farmers & Merchants Bancorp	13.16%	7.16%	0.70%
FFBW	N/A	N/A	N/A

Insider & Institutional Ownership

24.0% of Farmers & Merchants Bancorp shares are owned by institutional investors. 7.8% of Farmers & Merchants Bancorp shares are owned by insiders. Comparatively, 4.8% of FFBW shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current recommendations and price targets for Farmers & Merchants Bancorp and FFBW, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Farmers & Merchants Bancorp	0	2	0	0	2.00
FFBW	0	0	0	0	0.00

Farmers & Merchants Bancorp currently has a consensus price target of $24.00, indicating a potential downside of 27.25%. Given Farmers & Merchants Bancorp’s stronger consensus rating and higher possible upside, research analysts clearly believe Farmers & Merchants Bancorp is more favorable than FFBW.

Risk & Volatility

Farmers & Merchants Bancorp has a beta of 0.63, suggesting that its share price is 37% less volatile than the S&P 500. Comparatively, FFBW has a beta of 0.34, suggesting that its share price is 66% less volatile than the S&P 500.

Summary

Farmers & Merchants Bancorp beats FFBW on 10 of the 11 factors compared between the two stocks.

About Farmers & Merchants Bancorp

Farmers & Merchants Bancorp, Inc. operates as the bank holding company for The Farmers & Merchants State Bank that provides commercial banking services to individuals and small businesses in Northwest Ohio and Northeast Indiana. The company offers checking, savings, and time deposit accounts; certificates of deposit; and custodial services for individual retirement and health savings accounts. It also provides commercial, agricultural, and residential mortgage, as well as consumer lending products; loans for farmland, farm equipment, and livestock; operating loans for seeds, fertilizers, and feeds; home improvement loans; and loans for autos, trucks, recreational vehicles, and motorcycles. In addition, the company offers commercial real estate loans, such as lines of credit and machinery purchase loans. Further, it provides automated teller machine or interactive teller machine services; and online and mobile banking, bill-pay, on-line statement opportunities, and remote deposit capture or electronic deposit processing. Additionally, the company offers electronic transaction origination, such as wire and automated clearing house file transmittal services. Farmers & Merchants Bancorp, Inc. was founded in 1897 and is headquartered in Archbold, Ohio.

About FFBW

FFBW, Inc. operates as the holding company for First Federal Bank of Wisconsin that provides banking products and services in the United States. It offers deposit accounts, including noninterest-bearing and interest-bearing checking accounts, money market accounts, statement savings, and health savings, as well as certificates of deposit. The company also provides various loans, which include one- to four family owner-occupied and investor-owned residential real estate, multifamily residential real estate, commercial real estate, commercial and industrial, and commercial development loans, as well as consumer loans, such as home equity lines of credit, new and used automobile loans, boat loans, recreational vehicle loans, and loans secured by certificates of deposit. FFBW, Inc. was founded in 1922 and is based in Brookfield, Wisconsin.