Reviewing Farmers & Merchants Bank of Long Beach (OTCMKTS:FMBL) & Oak Valley Bancorp (NASDAQ:OVLY)

Dividends

Farmers & Merchants Bank of Long Beach pays an annual dividend of $112.00 per share and has a dividend yield of 2.0%. Oak Valley Bancorp pays an annual dividend of $0.60 per share and has a dividend yield of 2.2%. Farmers & Merchants Bank of Long Beach pays out 28.6% of its earnings in the form of a dividend. Oak Valley Bancorp pays out 20.2% 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. Oak Valley Bancorp has increased its dividend for 11 consecutive years. Oak Valley Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

Farmers & Merchants Bank of Long Beach has a beta of 0.27, meaning that its stock price is 73% less volatile than the S&P 500. Comparatively, Oak Valley Bancorp has a beta of 0.44, meaning that its stock price is 56% less volatile than the S&P 500.

Insider and Institutional Ownership

7.6% of Farmers & Merchants Bank of Long Beach shares are held by institutional investors. Comparatively, 30.9% of Oak Valley Bancorp shares are held by institutional investors. 12.8% of Farmers & Merchants Bank of Long Beach shares are held by company insiders. Comparatively, 18.1% of Oak Valley Bancorp shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Farmers & Merchants Bank of Long Beach and Oak Valley Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Farmers & Merchants Bank of Long Beach	10.78%	3.55%	0.41%
Oak Valley Bancorp	27.04%	13.54%	1.30%

Valuation & Earnings

This table compares Farmers & Merchants Bank of Long Beach and Oak Valley Bancorp”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Farmers & Merchants Bank of Long Beach	$459.33 million	1.44	$44.88 million	$391.48	14.10
Oak Valley Bancorp	$89.45 million	2.56	$24.95 million	$2.97	9.21

Farmers & Merchants Bank of Long Beach has higher revenue and earnings than Oak Valley Bancorp. Oak Valley Bancorp is trading at a lower price-to-earnings ratio than Farmers & Merchants Bank of Long Beach, indicating that it is currently the more affordable of the two stocks.

Summary

Oak Valley Bancorp beats Farmers & Merchants Bank of Long Beach on 10 of the 14 factors compared between the two stocks.

About Farmers & Merchants Bank of Long Beach

Farmers & Merchants Bank of Long Beach provides various banking products and services to individuals, professionals, and small to medium-sized businesses in Los Angeles, Orange, and Santa Barbara Counties. It offers checking, savings, Christmas club savings, health savings, market rate savings, and money market accounts; demand and time deposits; certificates of deposit; and individual retirement account. The company also provides personal, home, commercial real estate, real estate and construction, and commercial business loans, as well as lines of credit; financing for residential loans comprising single-family and multifamily loans; and credit and debit cards. In addition, it offers account management, receivables and payables, and risk management services; commercial lending services; and faith-based and healthcare banking services, as well as online and mobile banking services. Farmers & Merchants Bank of Long Beach was founded in 1907 and is headquartered in Long Beach, California.

About Oak Valley Bancorp

Oak Valley Bancorp operates as the bank holding company for Oak Valley Community Bank that provides a range of commercial banking services to individuals and small to medium-sized businesses in the Central Valley and the Eastern Sierras. The company's deposits products include checking and savings, money market, health savings, and individual retirement accounts, as well as certificates of deposit. It also offers commercial real estate loans, commercial business lending and trade finance, and small business administration lending, as well as consumer loans, including automobile loans, home mortgages, credit lines, and other personal loans. In addition, the company provides online and mobile banking, remote deposit capture, merchant, night depository, extended hours, wire transfer of funds, note collection services, and automated teller machines. The company was incorporated in 1990 and is headquartered in Oakdale, California.