IF Bancorp (NASDAQ:IROQ) and Farmers & Merchants Bancorp, Inc. (OH) (NASDAQ:FMAO) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, valuation, analyst recommendations, dividends, institutional ownership, risk and earnings.

Dividends

IF Bancorp pays an annual dividend of $0.30 per share and has a dividend yield of 1.9%. Farmers & Merchants Bancorp, Inc. (OH) pays an annual dividend of $0.64 per share and has a dividend yield of 3.1%. Farmers & Merchants Bancorp, Inc. (OH) pays out 37.6% of its earnings in the form of a dividend. IF Bancorp has raised its dividend for 6 consecutive years and Farmers & Merchants Bancorp, Inc. (OH) has raised its dividend for 2 consecutive years.

Profitability

This table compares IF Bancorp and Farmers & Merchants Bancorp, Inc. (OH)’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
IF Bancorp 12.18% 4.94% 0.56%
Farmers & Merchants Bancorp, Inc. (OH) 23.47% 7.82% 1.13%

Analyst Ratings

This is a breakdown of recent ratings and price targets for IF Bancorp and Farmers & Merchants Bancorp, Inc. (OH), as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
IF Bancorp 0 0 0 0 N/A
Farmers & Merchants Bancorp, Inc. (OH) 0 1 0 0 2.00

Farmers & Merchants Bancorp, Inc. (OH) has a consensus target price of $27.00, indicating a potential upside of 31.90%. Given Farmers & Merchants Bancorp, Inc. (OH)’s higher probable upside, analysts plainly believe Farmers & Merchants Bancorp, Inc. (OH) is more favorable than IF Bancorp.

Insider and Institutional Ownership

22.1% of IF Bancorp shares are owned by institutional investors. Comparatively, 18.3% of Farmers & Merchants Bancorp, Inc. (OH) shares are owned by institutional investors. 13.0% of IF Bancorp shares are owned by insiders. Comparatively, 10.0% of Farmers & Merchants Bancorp, Inc. (OH) shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares IF Bancorp and Farmers & Merchants Bancorp, Inc. (OH)’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
IF Bancorp $30.89 million 1.68 $3.56 million N/A N/A
Farmers & Merchants Bancorp, Inc. (OH) $80.13 million 2.84 $18.40 million $1.70 12.04

Farmers & Merchants Bancorp, Inc. (OH) has higher revenue and earnings than IF Bancorp.

Volatility & Risk

IF Bancorp has a beta of 0.62, meaning that its share price is 38% less volatile than the S&P 500. Comparatively, Farmers & Merchants Bancorp, Inc. (OH) has a beta of 0.25, meaning that its share price is 75% less volatile than the S&P 500.

Summary

Farmers & Merchants Bancorp, Inc. (OH) beats IF Bancorp on 8 of the 14 factors compared between the two stocks.

IF Bancorp Company Profile

IF Bancorp, Inc. operates as the savings and loan holding company for Iroquois Federal Savings and Loan Association that provides a range of banking and financial solutions to individual and corporate clients. The company offers various deposit accounts, including savings accounts, certificates of deposit, money market accounts, commercial and personal checking accounts, individual retirement accounts, and health savings accounts. It also provides loans comprising one- to four-family residential mortgage loans; multi-family mortgage loans; commercial real estate loans, such as farm loans; home equity lines of credit; commercial business loans; and consumer loans consisting of automobile loans, as well as construction loans and land development loans. In addition, the company sells property and casualty insurance, as well as offers annuities; mutual funds; individual and group retirement plans; life, disability, and health insurance; individual securities; managed accounts; and other financial services. Further, it offers ATM, online banking, mobile banking, ACH origination, remote deposit capture, and telephone banking services. The company operates through a network of six full-service banking offices located in the municipalities of Watseka, Danville, Clifton, Hoopeston, Savoy, and Bourbonnais, Illinois; and a loan production and wealth management office in Osage Beach, Missouri. IF Bancorp, Inc. was founded in 2011 and is based in Watseka, Illinois.

Farmers & Merchants Bancorp, Inc. (OH) 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 deposit; 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 13, 2019, the company operated through 30 offices. Farmers & Merchants Bancorp, Inc. was founded in 1897 and is based in Archbold, Ohio.

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