First Bancorp, Inc (ME) (NASDAQ:FNLC – Get Free Report) and F & M Bank (OTCMKTS:FMBM – Get Free Report) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, dividends, risk, valuation, earnings and institutional ownership.
Institutional and Insider Ownership
40.4% of First Bancorp, Inc (ME) shares are owned by institutional investors. Comparatively, 3.9% of F & M Bank shares are owned by institutional investors. 5.1% of First Bancorp, Inc (ME) shares are owned by company insiders. Comparatively, 10.7% of F & M Bank shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Profitability
This table compares First Bancorp, Inc (ME) and F & M Bank’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| First Bancorp, Inc (ME) | 20.34% | 13.09% | 1.14% |
| F & M Bank | 14.96% | 11.77% | 0.88% |
Volatility & Risk
Valuation and Earnings
This table compares First Bancorp, Inc (ME) and F & M Bank”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| First Bancorp, Inc (ME) | $177.61 million | 1.90 | $34.39 million | $3.24 | 9.23 |
| F & M Bank | $78.92 million | 1.64 | $11.23 million | $3.38 | 10.69 |
First Bancorp, Inc (ME) has higher revenue and earnings than F & M Bank. First Bancorp, Inc (ME) is trading at a lower price-to-earnings ratio than F & M Bank, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a summary of current recommendations and price targets for First Bancorp, Inc (ME) and F & M Bank, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| First Bancorp, Inc (ME) | 0 | 0 | 1 | 0 | 3.00 |
| F & M Bank | 0 | 0 | 0 | 0 | 0.00 |
Dividends
First Bancorp, Inc (ME) pays an annual dividend of $1.48 per share and has a dividend yield of 4.9%. F & M Bank pays an annual dividend of $1.04 per share and has a dividend yield of 2.9%. First Bancorp, Inc (ME) pays out 45.7% of its earnings in the form of a dividend. F & M Bank pays out 30.8% 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. First Bancorp, Inc (ME) has raised its dividend for 6 consecutive years. First Bancorp, Inc (ME) is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Summary
First Bancorp, Inc (ME) beats F & M Bank on 12 of the 16 factors compared between the two stocks.
About First Bancorp, Inc (ME)
The First Bancorp, Inc. operates as the holding company for First National Bank that provides a range of banking products and services to individuals and businesses. It offers various deposit products, including demand, NOW, time, savings, money market, and certificates of deposit accounts. The company also provides commercial loans comprising commercial real estate owner occupied, such as mortgage loans to finance investments in real property such as retail space, offices, industrial buildings, hotels, educational facilities, and other specific or mixed use properties; commercial real estate non-owner occupied loans; commercial construction to finance construction in a mix of owner- and nonowner occupied commercial real estate properties; and commercial and industrial loans, including revolving and term loan for financing working capital and/or capital investment. In addition, it offers commercial multifamily loans; residential real estate term and residential real estate construction loans; loans to municipalities in Maine for capitalized expenditures, construction projects, or tax anticipation notes; home equity revolving and term loans; and personal lines of credit and amortizing loans for various purposes, such as autos, recreational vehicles, debt consolidation, personal expenses, or overdraft protection. Further, the company offers private banking, financial planning, investment management, and trust services to individuals, businesses, non-profit organizations and municipalities; and brokerage, annuity, and various insurance products, as well as payment processing services. It operates through full-service banking offices in Lincoln, Knox, Waldo, Penobscot, Hancock, and Washington counties in the Mid-Coast, Eastern, and Down East regions of Maine. The company was formerly known as First National Lincoln Corporation and changed its name to The First Bancorp, Inc. in April 2008. The First Bancorp, Inc. was founded in 1864 and is based in Damariscotta, Maine.
About F & M Bank
F & M Bank Corp. operates as the bank holding company for Farmers & Merchants Bank that provides financial products and services to consumers and businesses in Virginia. The company offers commercial and individual demand and time deposit accounts, savings accounts, money market accounts, internet and mobile banking services, and drive-in banking services. It also provides construction loans, including residential, and land acquisition and development loans; commercial real estate loans; business loans; consumer loans, such as personal loans, automobile loans, deposit account loans, installment and demand loans, and home equity loans; residential mortgage loans; credit cards; dealer finance; farmland loans; multi-family loans; and commercial and industrial loans. In addition, the company offers brokerage services and commercial and personal insurance products. Further, it originates conventional and government agency sponsored mortgages; and offers title insurance and real estate settlement services. The company was founded in 1908 and is headquartered in Timberville, Virginia.
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