Red River Bancshares (NASDAQ:RRBI) and Farmers & Merchants Bancorp (OTCMKTS:FMCB) Head to Head Survey

Red River Bancshares (NASDAQ:RRBI) and Farmers & Merchants Bancorp (OTCMKTS:FMCB) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, valuation, risk, analyst recommendations, earnings, dividends and institutional ownership.

Analyst Recommendations

This is a summary of current recommendations for Red River Bancshares and Farmers & Merchants Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Red River Bancshares	0	0	1	0	3.00
Farmers & Merchants Bancorp	0	0	0	0	0.00

Red River Bancshares currently has a consensus price target of $67.00, suggesting a potential upside of 8.52%. Given Red River Bancshares’ stronger consensus rating and higher probable upside, research analysts clearly believe Red River Bancshares is more favorable than Farmers & Merchants Bancorp.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Red River Bancshares	23.62%	11.85%	1.23%
Farmers & Merchants Bancorp	30.61%	15.19%	1.64%

Insider & Institutional Ownership

27.6% of Red River Bancshares shares are owned by institutional investors. Comparatively, 5.6% of Farmers & Merchants Bancorp shares are owned by institutional investors. 15.9% of Red River Bancshares shares are owned by company insiders. Comparatively, 8.5% of Farmers & Merchants Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

Red River Bancshares pays an annual dividend of $0.48 per share and has a dividend yield of 0.8%. Farmers & Merchants Bancorp pays an annual dividend of $18.60 per share and has a dividend yield of 1.8%. Red River Bancshares pays out 8.5% of its earnings in the form of a dividend. Farmers & Merchants Bancorp pays out 14.7% 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. Red River Bancshares has increased its dividend for 3 consecutive years.

Volatility and Risk

Red River Bancshares has a beta of 0.54, suggesting that its share price is 46% less volatile than the S&P 500. Comparatively, Farmers & Merchants Bancorp has a beta of 0.24, suggesting that its share price is 76% less volatile than the S&P 500.

Valuation & Earnings

This table compares Red River Bancshares and Farmers & Merchants Bancorp”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Red River Bancshares	$157.67 million	2.66	$34.24 million	$5.67	10.89
Farmers & Merchants Bancorp	$292.68 million	2.53	$88.46 million	$126.87	8.09

Farmers & Merchants Bancorp has higher revenue and earnings than Red River Bancshares. Farmers & Merchants Bancorp is trading at a lower price-to-earnings ratio than Red River Bancshares, indicating that it is currently the more affordable of the two stocks.

Summary

Red River Bancshares beats Farmers & Merchants Bancorp on 10 of the 17 factors compared between the two stocks.

About Red River Bancshares

Red River Bancshares, Inc. operates as a bank holding company for Red River Bank that provides banking products and services to commercial and retail customers in Louisiana. The company provides various deposit products, including checking, saving, money market accounts, and time deposits. It offers commercial real estate loans; one-to-four family mortgage loans and home equity lines of credit; construction and development loans; commercial and industrial loans; small business administration paycheck protection program loans; tax-exempt loans; consumer loans to individuals for personal, family, and household purposes, including secured and unsecured installment and term loans; home mortgage loans; and lines of credit and standby letters of credit. In addition, the company provides treasury management, private banking, and brokerage; investment advisory, financial planning, and a suite of retirement plans; debit and credit cards, direct deposits, cashier's checks, and wire transfer services; online banking services, including access to account balances, online transfers, online bill payment, and electronic delivery of customer statements; and banking services in person, through ATMs, drive-through facilities, night deposits, telephone, mail, mobile banking, and remote deposits. Red River Bancshares, Inc. was incorporated in 1998 and is headquartered in Alexandria, Louisiana.

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.