Financial Review: Farmers & Merchants Bancorp (NASDAQ:FMAO) vs. Wayne Savings Bancshares (OTCMKTS:WAYN)

Wayne Savings Bancshares (OTCMKTS:WAYNGet Free Report) and Farmers & Merchants Bancorp (NASDAQ:FMAOGet Free Report) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, earnings, risk, dividends and profitability.

Earnings and Valuation

This table compares Wayne Savings Bancshares and Farmers & Merchants Bancorp’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Wayne Savings Bancshares $38.11 million 1.40 $7.83 million $3.21 7.56
Farmers & Merchants Bancorp $93.05 million 2.95 $22.79 million $1.59 12.62

Farmers & Merchants Bancorp has higher revenue and earnings than Wayne Savings Bancshares. Wayne Savings Bancshares 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.

Volatility and Risk

Wayne Savings Bancshares has a beta of 0.28, indicating that its share price is 72% less volatile than the S&P 500. Comparatively, Farmers & Merchants Bancorp has a beta of 0.62, indicating that its share price is 38% less volatile than the S&P 500.

Institutional & Insider Ownership

12.1% of Wayne Savings Bancshares shares are owned by institutional investors. Comparatively, 24.0% of Farmers & Merchants Bancorp shares are owned by institutional investors. 3.2% of Wayne Savings Bancshares shares are owned by insiders. Comparatively, 7.8% of Farmers & Merchants Bancorp shares are owned by 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.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Wayne Savings Bancshares and Farmers & Merchants Bancorp, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Wayne Savings Bancshares 0 0 0 0 N/A
Farmers & Merchants Bancorp 1 2 0 0 1.67

Farmers & Merchants Bancorp has a consensus price target of $23.17, suggesting a potential upside of 15.49%. Given Farmers & Merchants Bancorp’s higher probable upside, analysts plainly believe Farmers & Merchants Bancorp is more favorable than Wayne Savings Bancshares.

Dividends

Wayne Savings Bancshares pays an annual dividend of $0.92 per share and has a dividend yield of 3.8%. Farmers & Merchants Bancorp pays an annual dividend of $0.88 per share and has a dividend yield of 4.4%. Wayne Savings Bancshares pays out 28.7% of its earnings in the form of a dividend. Farmers & Merchants Bancorp pays out 55.3% 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. Farmers & Merchants Bancorp has increased its dividend for 14 consecutive years. Farmers & Merchants Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Wayne Savings Bancshares and Farmers & Merchants Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Wayne Savings Bancshares 17.74% 16.26% 1.03%
Farmers & Merchants Bancorp 13.34% 7.01% 0.67%

Summary

Farmers & Merchants Bancorp beats Wayne Savings Bancshares on 10 of the 15 factors compared between the two stocks.

About Wayne Savings Bancshares

(Get Free Report)

Wayne Savings Bancshares, Inc. operates as the holding company for Wayne Savings Community Bank that provides personal and business banking products and services to individuals, businesses, and other organizations. The company offers checking, savings, money market, and term certificate accounts, as well as certificates of deposit. It also provides residential mortgage, commercial, installment, residential and nonresidential real estate, commercial real estate, residential construction, multi-family real estate, land, commercial business, consumer, home, home equity, auto, recreational vehicle, personal, furniture and appliance, agriculture, and term loans, as well as lines of credit, government guaranteed programs, and standby letters of credit. In addition, the company offers retirement planning, investment advisory, insurance, and wealth management and trust services. Further, it provides overdraft protection, re-order check, remote deposit capture, merchant, sweep, online and mobile banking, and bill pay services, as well as debit, credit, and gift cards. The company was founded in 1899 and is based in Wooster, Ohio.

About Farmers & Merchants Bancorp

(Get Free Report)

Farmers & Merchants Bancorp, Inc. operates as the bank holding company for The Farmers & Merchants State Bank that provides commercial banking services to individuals and small businesses in Northwest Ohio and Northeast Indiana. The company offers checking, savings, and time deposit accounts; certificates of deposit; and custodial services for individual retirement and health savings accounts. It also provides commercial, agricultural, and residential mortgage, as well as consumer lending products; loans for farmland, farm equipment, and livestock; operating loans for seeds, fertilizers, and feeds; home improvement loans; and loans for autos, trucks, recreational vehicles, and motorcycles. In addition, the company offers commercial real estate loans, such as lines of credit and machinery purchase loans. Further, it provides automated teller machine or interactive teller machine services; and online and mobile banking, bill-pay, on-line statement opportunities, and remote deposit capture or electronic deposit processing. Additionally, the company offers electronic transaction origination, such as wire and automated clearing house file transmittal services. Farmers & Merchants Bancorp, Inc. was founded in 1897 and is headquartered in Archbold, Ohio.

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