BancFirst (NASDAQ:BANF – Get Free Report) and Farmers & Merchants Bancorp (OTCMKTS:FMCB – Get Free Report) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, profitability, earnings, analyst recommendations, valuation, institutional ownership and risk.
Profitability
This table compares BancFirst and Farmers & Merchants Bancorp’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| BancFirst | 24.94% | 14.19% | 1.71% |
| Farmers & Merchants Bancorp | 30.89% | 15.32% | 1.66% |
Analyst Recommendations
This is a breakdown of recent ratings and price targets for BancFirst and Farmers & Merchants Bancorp, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| BancFirst | 0 | 3 | 1 | 0 | 2.25 |
| Farmers & Merchants Bancorp | 0 | 0 | 0 | 0 | 0.00 |
Dividends
BancFirst pays an annual dividend of $1.96 per share and has a dividend yield of 1.8%. Farmers & Merchants Bancorp pays an annual dividend of $20.00 per share and has a dividend yield of 2.0%. BancFirst pays out 27.8% of its earnings in the form of a dividend. Farmers & Merchants Bancorp pays out 15.3% 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. BancFirst has increased its dividend for 31 consecutive years. Farmers & Merchants Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.
Insider and Institutional Ownership
51.7% of BancFirst shares are held by institutional investors. Comparatively, 5.6% of Farmers & Merchants Bancorp shares are held by institutional investors. 32.4% of BancFirst shares are held by insiders. Comparatively, 8.5% of Farmers & Merchants Bancorp shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Risk & Volatility
BancFirst has a beta of 0.76, meaning that its share price is 24% less volatile than the S&P 500. Comparatively, Farmers & Merchants Bancorp has a beta of 0.24, meaning that its share price is 76% less volatile than the S&P 500.
Earnings & Valuation
This table compares BancFirst and Farmers & Merchants Bancorp”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| BancFirst | $908.71 million | 4.08 | $216.35 million | $7.05 | 15.79 |
| Farmers & Merchants Bancorp | $292.68 million | 2.46 | $88.46 million | $130.83 | 7.64 |
BancFirst has higher revenue and earnings than Farmers & Merchants Bancorp. Farmers & Merchants Bancorp is trading at a lower price-to-earnings ratio than BancFirst, indicating that it is currently the more affordable of the two stocks.
Summary
BancFirst beats Farmers & Merchants Bancorp on 12 of the 17 factors compared between the two stocks.
About BancFirst
BancFirst Corporation operates as the bank holding company for BancFirst that provides a range of commercial banking services to retail customers, and small to medium-sized businesses. The company operates through BancFirst Metropolitan Banks, BancFirst Community Banks, Pegasus, Worthington, and Other Financial Services segments. It offers checking accounts, negotiable order of withdrawal accounts, savings accounts, money market accounts, sweep accounts, club accounts, individual retirement accounts, and certificates of deposit, as well as overdraft protection and auto draft services. The company also provides commercial and agricultural non-real estate loans for working capital, facilities acquisition or expansion, purchase of equipment, and other needs; lending services that include private banking, energy, commercial and residential real estate, and commercial and industrial loans; and loans to finance purchases of consumer goods, such as automobiles, boats, household goods, vacations, and education. In addition, it engages in the investment management and administration of trusts for individuals, corporations, and employee benefit plans, as well as bond trustee and paying agent business for various Oklahoma municipalities and governmental entities; and provision of item processing, research, and other correspondent banking services to financial institutions and governmental units. Further, the company provides insurance agency services; depository and funds transfer, collection, safe deposit box, cash management, and other services. It serves customers in non-metropolitan trade centers and cities in the metropolitan statistical areas of Oklahoma. The company was formerly known as United Community Corporation and changed its name to BancFirst Corporation in November 1988. BancFirst Corporation was incorporated in 1984 and is headquartered in Oklahoma City, Oklahoma.
About Farmers & Merchants Bancorp
Farmers & Merchants Bancorp operates as the bank holding company for Farmers & Merchants Bank of Central California that provides various banking services to businesses and individuals. The company accepts various deposit products, including checking, savings, money market, time certificates of deposit, and individual retirement accounts. It also offers range of lending products comprising commercial and residential real estate, real estate construction, agribusiness, and consumer loans, as well as equipment leases and credit card services; commercial products, including term loans, lines of credit and other working capital financing, and letters of credit; and financing products, such as automobile financing, home improvement, and home equity lines of credit. In addition, the company provides various specialized services consisting of credit card programs for merchants, lockbox and other collection services, account reconciliation, investment sweep, online account access, and electronic funds transfers through domestic and international wire and automated clearinghouse; online banking services; and investment products, such as mutual funds and annuities. The company was founded in 1916 and is headquartered in Lodi, California.
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