ACNB (NASDAQ:ACNB) vs. Farmers & Merchants Bancorp (OTCMKTS:FMCB) Head-To-Head Review

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

Valuation and Earnings

This table compares ACNB 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
ACNB	$191.82 million	2.57	$37.05 million	$3.54	13.42
Farmers & Merchants Bancorp	$303.12 million	2.64	$93.61 million	$134.01	8.62

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
ACNB	19.32%	12.77%	1.55%
Farmers & Merchants Bancorp	30.88%	15.05%	1.67%

Dividends

ACNB pays an annual dividend of $1.52 per share and has a dividend yield of 3.2%. Farmers & Merchants Bancorp pays an annual dividend of $20.40 per share and has a dividend yield of 1.8%. ACNB pays out 42.9% of its earnings in the form of a dividend. Farmers & Merchants Bancorp pays out 15.2% 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. ACNB has raised its dividend for 8 consecutive years. ACNB is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of recent ratings and price targets for ACNB and Farmers & Merchants Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ACNB	0	1	2	1	3.00
Farmers & Merchants Bancorp	0	0	0	0	0.00

ACNB currently has a consensus target price of $48.67, indicating a potential upside of 2.46%. Given ACNB’s stronger consensus rating and higher probable upside, equities research analysts plainly believe ACNB is more favorable than Farmers & Merchants Bancorp.

Volatility and Risk

ACNB has a beta of 0.86, suggesting that its stock price is 14% less volatile than the S&P 500. Comparatively, Farmers & Merchants Bancorp has a beta of 0.16, suggesting that its stock price is 84% less volatile than the S&P 500.

Institutional & Insider Ownership

32.4% of ACNB shares are held by institutional investors. Comparatively, 5.6% of Farmers & Merchants Bancorp shares are held by institutional investors. 3.5% of ACNB shares are held by insiders. Comparatively, 8.5% 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 stock is poised for long-term growth.

About ACNB

ACNB Corporation, a financial holding company, offers banking, insurance, and financial services to individual, business, and government customers in the United States. The company provides checking, savings, and money market deposit accounts, as well as time deposits and debit cards. It also offers commercial lending products, such as commercial mortgages, real estate development and construction loans, accounts receivable and inventory financing, and agricultural and governmental loans; consumer lending products, including home equity loans and lines of credit, automobile and recreational vehicle loans, manufactured housing loans, and personal lines of credit; and mortgage lending programs include personal residential mortgages, and residential construction and investment mortgage loans. In addition, the company provides other services that are related to testamentary trusts, life insurance trusts, charitable remainder trusts, guardianships, powers of attorney, custodial accounts, and investment management and advisory accounts; and retail brokerage services. Further, it acts as a trustee to invest in, protect, manage, and distribute financial assets. Additionally, the company offers property and casualty, health, life, and disability insurance products to commercial and personal clients; and online, telephone, and mobile banking, as well as automated teller machine services. ACNB Corporation was founded in 1857 and is headquartered in Gettysburg, Pennsylvania.

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.