Farmers & Merchants Bancorp, Inc. (OH) Common Stock (NASDAQ: CFFN) and Capitol Federal Financial (NASDAQ:CFFN) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, risk, profitability, institutional ownership, valuation, earnings and analyst recommendations.

Volatility and Risk

Farmers & Merchants Bancorp, Inc. (OH) Common Stock has a beta of 0.12, meaning that its share price is 88% less volatile than the S&P 500. Comparatively, Capitol Federal Financial has a beta of 0.47, meaning that its share price is 53% less volatile than the S&P 500.

Valuation and Earnings

This table compares Farmers & Merchants Bancorp, Inc. (OH) Common Stock and Capitol Federal Financial’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Farmers & Merchants Bancorp, Inc. (OH) Common Stock $51.98 million 7.82 $12.72 million $1.38 31.80
Capitol Federal Financial $335.38 million 5.52 $84.13 million N/A N/A

Capitol Federal Financial has higher revenue and earnings than Farmers & Merchants Bancorp, Inc. (OH) Common Stock.

Analyst Recommendations

This is a breakdown of recent ratings for Farmers & Merchants Bancorp, Inc. (OH) Common Stock and Capitol Federal Financial, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Farmers & Merchants Bancorp, Inc. (OH) Common Stock 0 1 0 0 2.00
Capitol Federal Financial 0 2 0 0 2.00

Capitol Federal Financial has a consensus target price of $13.75, indicating a potential upside of 2.77%. Given Capitol Federal Financial’s higher possible upside, analysts clearly believe Capitol Federal Financial is more favorable than Farmers & Merchants Bancorp, Inc. (OH) Common Stock.

Dividends

Farmers & Merchants Bancorp, Inc. (OH) Common Stock pays an annual dividend of $0.56 per share and has a dividend yield of 1.3%. Capitol Federal Financial pays an annual dividend of $0.34 per share and has a dividend yield of 2.5%. Farmers & Merchants Bancorp, Inc. (OH) Common Stock pays out 40.6% of its earnings in the form of a dividend.

Insider & Institutional Ownership

14.8% of Farmers & Merchants Bancorp, Inc. (OH) Common Stock shares are owned by institutional investors. Comparatively, 74.2% of Capitol Federal Financial shares are owned by institutional investors. 4.5% of Farmers & Merchants Bancorp, Inc. (OH) Common Stock shares are owned by insiders. Comparatively, 2.2% of Capitol Federal Financial shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Farmers & Merchants Bancorp, Inc. (OH) Common Stock and Capitol Federal Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Farmers & Merchants Bancorp, Inc. (OH) Common Stock 26.50% 10.78% 1.31%
Capitol Federal Financial 28.26% 6.68% 1.00%

Summary

Capitol Federal Financial beats Farmers & Merchants Bancorp, Inc. (OH) Common Stock on 8 of the 13 factors compared between the two stocks.

Farmers & Merchants Bancorp, Inc. (OH) Common Stock Company Profile

Farmers & Merchants Bancorp, Inc. operates as the bank holding company for The Farmers & Merchants State Bank that provides commercial banking, retail banking, and other financial products and services to individuals and small businesses in northwest Ohio and northeast Indiana. The company offers checking accounts; savings and time deposits, including certificates of deposits; and custodial services for individual retirement accounts and health savings accounts. It also provides commercial, agricultural, and residential mortgage, as well as consumer and credit card lending products; loans for farm land, farm equipment, and livestock; operating loans for seeds, fertilizers, and feeds; home improvements loans; and loans for autos, trucks, recreational vehicles, and motorcycles. In addition, the company offers commercial real estate loans, such as operation lines of credit and machinery purchase loans; and agricultural and consumer real estate, commercial and industrial, agricultural, and consumer loans, as well as industrial development bonds. Further, it provides automated teller machine services; and online banking, remote deposit capture or electronic deposit processing, merchant credit card, and mobile banking services. As of February 8, 2018, the company operated through 25 offices. Farmers & Merchants Bancorp, Inc. was founded in 1897 and is based in Archbold, Ohio.

Capitol Federal Financial Company Profile

Capitol Federal Financial, Inc. operates as the holding company for Capitol Federal Savings Bank that provides various retail banking products and services in the United States. The company accepts a range of deposit products comprising savings accounts, money market accounts, interest-bearing and non-interest-bearing checking accounts, and certificates of deposits. It also provides various loan products, such as one- to four-family residential real estate loans; construction-to-permanent loans; consumer loans comprising home equity loans and lines of credit, home improvement loans, auto loans, and loans secured by savings deposits; and commercial real estate loans consisting of various property types, including hotels, office and retail buildings, senior housing facilities, and multi-family dwellings located in Texas, Missouri, Kansas, Nebraska, Colorado, Arkansas, California, and Montana. In addition, the company offers mobile, telephone, and online banking services, as well as bill payment services; operates a call center; and invests in various securities. It operates a network of 47 branches, which include 37 traditional branches and 10 in-store branches located in 9 counties throughout Kansas and 3 counties in Missouri. The company was founded in 1893 and is headquartered in Topeka, Kansas.

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