Farmers & Merchants Bancorp (NASDAQ:FMAO – Get Free Report) and FinWise Bancorp (NASDAQ:FINW – Get Free Report) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their valuation, risk, earnings, profitability, analyst recommendations, institutional ownership and dividends.
Volatility & Risk
Farmers & Merchants Bancorp has a beta of 0.76, indicating that its stock price is 24% less volatile than the S&P 500. Comparatively, FinWise Bancorp has a beta of 0.7, indicating that its stock price is 30% less volatile than the S&P 500.
Institutional and Insider Ownership
24.0% of Farmers & Merchants Bancorp shares are owned by institutional investors. Comparatively, 35.4% of FinWise Bancorp shares are owned by institutional investors. 7.3% of Farmers & Merchants Bancorp shares are owned by insiders. Comparatively, 22.4% of FinWise Bancorp shares are owned by 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.
Earnings and Valuation
This table compares Farmers & Merchants Bancorp and FinWise Bancorp”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Farmers & Merchants Bancorp | $129.96 million | 3.85 | $33.31 million | $3.11 | 11.69 |
| FinWise Bancorp | $150.96 million | 1.26 | $16.09 million | $1.35 | 10.13 |
Farmers & Merchants Bancorp has higher earnings, but lower revenue than FinWise Bancorp. FinWise Bancorp is trading at a lower price-to-earnings ratio than Farmers & Merchants Bancorp, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a breakdown of recent recommendations and price targets for Farmers & Merchants Bancorp and FinWise Bancorp, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Farmers & Merchants Bancorp | 0 | 3 | 0 | 1 | 2.50 |
| FinWise Bancorp | 0 | 3 | 1 | 0 | 2.25 |
Farmers & Merchants Bancorp presently has a consensus price target of $33.75, suggesting a potential downside of 7.15%. FinWise Bancorp has a consensus price target of $15.50, suggesting a potential upside of 13.30%. Given FinWise Bancorp’s higher probable upside, analysts plainly believe FinWise Bancorp is more favorable than Farmers & Merchants Bancorp.
Profitability
This table compares Farmers & Merchants Bancorp and FinWise Bancorp’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Farmers & Merchants Bancorp | 21.30% | 11.25% | 1.22% |
| FinWise Bancorp | 7.03% | 9.78% | 2.06% |
Summary
Farmers & Merchants Bancorp beats FinWise Bancorp on 9 of the 15 factors compared between the two stocks.
About Farmers & Merchants Bancorp
Farmers & Merchants Bancorp, Inc. is a bank holding company, which engages in the provision of commercial banking, retail banking, and financial services. It includes commercial, agricultural, and residential mortgages as well as consumer and credit card lending activities. The firm also offers checking account services, and savings and time deposit services. The company was founded in 1985 and is headquartered in Archbold, OH.
About FinWise Bancorp
FinWise Bancorp operates as the bank holding company for FinWise Bank that provides various banking products and services to individual and corporate customers in Utah. The company offers various deposit products, including interest and noninterest bearing demand accounts, health savings account demand deposits, NOW and money market accounts, and checking and savings accounts, as well as time deposits and certificates of deposits. It also provides loans, including consumer, small business administration, commercial, commercial real estate, and residential real estate loans. In addition, the company offers debit cards, remote deposit capture, online banking, mobile banking, and direct deposit services; and business accounts and cash management services, such as business checking and savings accounts, and treasury services. FinWise Bancorp was founded in 1999 and is headquartered in Murray, Utah.
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