Dime Community Bancshares (NASDAQ:DCOM – Get Free Report) and Farmers & Merchants Bancorp (OTCMKTS:FMCB – Get Free Report) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, risk, dividends and earnings.
Institutional & Insider Ownership
75.3% of Dime Community Bancshares shares are owned by institutional investors. Comparatively, 5.6% of Farmers & Merchants Bancorp shares are owned by institutional investors. 9.1% of Dime Community Bancshares shares are owned by insiders. Comparatively, 8.0% of Farmers & Merchants Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Profitability
This table compares Dime Community Bancshares and Farmers & Merchants Bancorp’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Dime Community Bancshares | 4.50% | 5.43% | 0.46% |
| Farmers & Merchants Bancorp | 30.22% | 15.22% | 1.62% |
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Dime Community Bancshares | 0 | 0 | 3 | 1 | 3.25 |
| Farmers & Merchants Bancorp | 0 | 0 | 0 | 0 | 0.00 |
Dime Community Bancshares presently has a consensus target price of $38.50, suggesting a potential upside of 35.71%. Given Dime Community Bancshares’ stronger consensus rating and higher possible upside, research analysts clearly believe Dime Community Bancshares is more favorable than Farmers & Merchants Bancorp.
Valuation and Earnings
This table compares Dime Community Bancshares and Farmers & Merchants Bancorp”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Dime Community Bancshares | $314.10 million | 3.94 | $29.08 million | $0.59 | 48.08 |
| Farmers & Merchants Bancorp | $292.68 million | 2.40 | $88.46 million | $121.02 | 8.28 |
Farmers & Merchants Bancorp has lower revenue, but higher earnings than Dime Community Bancshares. Farmers & Merchants Bancorp is trading at a lower price-to-earnings ratio than Dime Community Bancshares, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Dime Community Bancshares has a beta of 1.04, suggesting that its share price is 4% more volatile than the S&P 500. Comparatively, Farmers & Merchants Bancorp has a beta of 0.21, suggesting that its share price is 79% less volatile than the S&P 500.
Dividends
Dime Community Bancshares pays an annual dividend of $1.00 per share and has a dividend yield of 3.5%. Farmers & Merchants Bancorp pays an annual dividend of $18.60 per share and has a dividend yield of 1.9%. Dime Community Bancshares pays out 169.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Farmers & Merchants Bancorp pays out 15.4% of its earnings in the form of a dividend.
Summary
Dime Community Bancshares beats Farmers & Merchants Bancorp on 11 of the 17 factors compared between the two stocks.
About Dime Community Bancshares
Dime Community Bancshares, Inc. operates as the holding company for Dime Community Bank that engages in the provision of various commercial banking and financial services. The company accepts time, savings, and demand deposits from the businesses, consumers, and local municipalities. It also offers commercial real estate loans; multi-family mortgage loans; residential mortgage loans; letters of credit; secured and unsecured commercial and consumer loans; lines of credit; home equity loans; and construction and land loans. In addition, the company invests in Federal Home Loan Bank, Federal National Mortgage Association, Government National Mortgage Association, and Federal Home Loan Mortgage Corporation mortgage-backed securities, collateralized mortgage obligations, and other asset backed securities; U.S. Treasury securities; New York state and local municipal obligations; U.S. government-sponsored enterprise securities; and corporate bonds. Further, it offers certificate of deposit account registry services and insured cash sweep programs; federal deposit insurance corporation insurance; merchant credit and debit card processing, automated teller machines, cash management services, lockbox processing, online banking services, remote deposit capture, safe deposit boxes, and individual retirement accounts; investment products and services through a third-party broker dealer; and title insurance broker services for small and medium sized businesses, and municipal and consumer relationships. The company was founded in 1910 and is headquartered in Hauppauge, New York.
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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