Reviewing First Northwest Bancorp (NASDAQ:FNWB) and Farmers & Merchants Bank of Long Beach (OTCMKTS:FMBL)

First Northwest Bancorp (NASDAQ:FNWB) and Farmers & Merchants Bank of Long Beach (OTCMKTS:FMBL) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, institutional ownership, valuation, profitability, risk, analyst recommendations and dividends.

Dividends

First Northwest Bancorp pays an annual dividend of $0.28 per share and has a dividend yield of 3.7%. Farmers & Merchants Bank of Long Beach pays an annual dividend of $112.00 per share and has a dividend yield of 1.6%. First Northwest Bancorp pays out 700.0% 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 Bank of Long Beach pays out 28.3% of its earnings in the form of a dividend.

Volatility and Risk

First Northwest Bancorp has a beta of 0.73, suggesting that its share price is 27% less volatile than the S&P 500. Comparatively, Farmers & Merchants Bank of Long Beach has a beta of 0.28, suggesting that its share price is 72% less volatile than the S&P 500.

Profitability

This table compares First Northwest Bancorp and Farmers & Merchants Bank of Long Beach’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Northwest Bancorp	0.32%	0.25%	0.02%
Farmers & Merchants Bank of Long Beach	11.10%	3.57%	0.42%

Earnings and Valuation

This table compares First Northwest Bancorp and Farmers & Merchants Bank of Long Beach”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Northwest Bancorp	$124.95 million	0.57	-$6.61 million	$0.04	188.50
Farmers & Merchants Bank of Long Beach	$459.33 million	1.83	$44.88 million	$396.33	17.63

Farmers & Merchants Bank of Long Beach has higher revenue and earnings than First Northwest Bancorp. Farmers & Merchants Bank of Long Beach is trading at a lower price-to-earnings ratio than First Northwest Bancorp, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

66.1% of First Northwest Bancorp shares are held by institutional investors. Comparatively, 7.6% of Farmers & Merchants Bank of Long Beach shares are held by institutional investors. 5.5% of First Northwest Bancorp shares are held by company insiders. Comparatively, 12.8% of Farmers & Merchants Bank of Long Beach shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent recommendations for First Northwest Bancorp and Farmers & Merchants Bank of Long Beach, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Northwest Bancorp	0	1	1	0	2.50
Farmers & Merchants Bank of Long Beach	0	0	0	0	0.00

First Northwest Bancorp currently has a consensus price target of $12.75, indicating a potential upside of 69.10%. Given First Northwest Bancorp’s stronger consensus rating and higher possible upside, equities research analysts clearly believe First Northwest Bancorp is more favorable than Farmers & Merchants Bank of Long Beach.

Summary

Farmers & Merchants Bank of Long Beach beats First Northwest Bancorp on 9 of the 16 factors compared between the two stocks.

About First Northwest Bancorp

First Northwest Bancorp operates as a bank holding company for First Fed Bank that provides commercial and consumer banking services to individuals, businesses, and nonprofit organizations in western Washington, the United States. The company accepts various deposit instruments, including checking, money market deposit, savings, and transaction accounts, as well as certificates of deposit. It also originates one- to four-family mortgage loans, commercial and multi-family real estate loans, construction and land loans, and commercial business loans, as well as consumer loans primarily consisting of automobile loans, and home-equity loans and lines of credit. First Northwest Bancorp operates branch offices in Clallam, Jefferson, King, Kitsap, and Whatcom Counties, Washington. First Northwest Bancorp was founded in 1923 and is based in Port Angeles, Washington.

About Farmers & Merchants Bank of Long Beach

Farmers & Merchants Bank of Long Beach provides various banking products and services to individuals, professionals, and small to medium-sized businesses in Los Angeles, Orange, and Santa Barbara Counties. It offers checking, savings, Christmas club savings, health savings, market rate savings, and money market accounts; demand and time deposits; certificates of deposit; and individual retirement account. The company also provides personal, home, commercial real estate, real estate and construction, and commercial business loans, as well as lines of credit; financing for residential loans comprising single-family and multifamily loans; and credit and debit cards. In addition, it offers account management, receivables and payables, and risk management services; commercial lending services; and faith-based and healthcare banking services, as well as online and mobile banking services. Farmers & Merchants Bank of Long Beach was founded in 1907 and is headquartered in Long Beach, California.