First Financial Bankshares (NASDAQ:FFIN) vs. Farmers & Merchants Bancorp (OTCMKTS:FMCB) Financial Comparison

First Financial Bankshares (NASDAQ:FFIN) and Farmers & Merchants Bancorp (OTCMKTS:FMCB) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, valuation, earnings, institutional ownership, risk, analyst recommendations and profitability.

Earnings and Valuation

This table compares First Financial Bankshares and Farmers & Merchants Bancorp”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Financial Bankshares	$752.91 million	6.34	$223.51 million	$1.72	19.40
Farmers & Merchants Bancorp	$292.68 million	2.54	$88.46 million	$126.87	8.13

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

Profitability

This table compares First Financial Bankshares and Farmers & Merchants Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Financial Bankshares	31.01%	14.69%	1.75%
Farmers & Merchants Bancorp	30.61%	15.03%	1.64%

Analyst Ratings

This is a breakdown of recent ratings and target prices for First Financial Bankshares and Farmers & Merchants Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Financial Bankshares	0	5	0	0	2.00
Farmers & Merchants Bancorp	0	0	0	0	0.00

First Financial Bankshares currently has a consensus price target of $39.00, suggesting a potential upside of 16.87%. Given First Financial Bankshares’ stronger consensus rating and higher probable upside, analysts plainly believe First Financial Bankshares is more favorable than Farmers & Merchants Bancorp.

Insider & Institutional Ownership

69.8% of First Financial Bankshares shares are held by institutional investors. Comparatively, 5.6% of Farmers & Merchants Bancorp shares are held by institutional investors. 4.0% of First Financial Bankshares shares are held by insiders. Comparatively, 8.0% of Farmers & Merchants Bancorp shares are held 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.

Dividends

First Financial Bankshares pays an annual dividend of $0.76 per share and has a dividend yield of 2.3%. Farmers & Merchants Bancorp pays an annual dividend of $20.00 per share and has a dividend yield of 1.9%. First Financial Bankshares pays out 44.2% of its earnings in the form of a dividend. Farmers & Merchants Bancorp pays out 15.8% 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. First Financial Bankshares has increased its dividend for 15 consecutive years. First Financial Bankshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

First Financial Bankshares has a beta of 0.86, indicating that its stock price is 14% less volatile than the S&P 500. Comparatively, Farmers & Merchants Bancorp has a beta of 0.24, indicating that its stock price is 76% less volatile than the S&P 500.

Summary

First Financial Bankshares beats Farmers & Merchants Bancorp on 12 of the 16 factors compared between the two stocks.

About First Financial Bankshares

First Financial Bankshares, Inc., through its subsidiaries, provides commercial banking products and services in Texas. The company offers checking, savings and time deposits; automated teller machines, drive-in, and night deposit services; safe deposit facilities, remote deposit capture, internet banking, mobile banking, payroll cards, funds transfer, and performing other customary commercial banking services; securities brokerage services; and trust and wealth management services, including wealth management, estates administration, oil and gas management, testamentary trusts, revocable and irrevocable trusts, and agency accounts. It also provides commercial and industrial, municipal, agricultural, construction and development, farm, residential, and consumer auto and non-auto, as well as non-owner occupied and owner occupied commercial real estate loans. In addition, the company offers advisory and specialized services related to asset management, investing, purchasing, advertising, public relations, and technology services. First Financial Bankshares, Inc. was founded in 1890 and is headquartered in Abilene, Texas.

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.