Head to Head Contrast: Farmers & Merchants Bancorp (NASDAQ:FMAO) and OptimumBank (NASDAQ:OPHC)

OptimumBank (NASDAQ:OPHC) and Farmers & Merchants Bancorp (NASDAQ:FMAO) are both small-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, analyst recommendations, valuation, earnings, risk, institutional ownership and profitability.

Earnings & Valuation

This table compares OptimumBank 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
OptimumBank	$58.79 million	1.88	$6.28 million	$0.87	10.04
Farmers & Merchants Bancorp	$126.48 million	3.74	$33.31 million	$2.91	11.80

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

Risk and Volatility

OptimumBank has a beta of 0.29, suggesting that its share price is 71% less volatile than the S&P 500. Comparatively, Farmers & Merchants Bancorp has a beta of 0.8, suggesting that its share price is 20% less volatile than the S&P 500.

Insider and Institutional Ownership

7.4% of OptimumBank shares are owned by institutional investors. Comparatively, 24.0% of Farmers & Merchants Bancorp shares are owned by institutional investors. 18.7% of OptimumBank shares are owned by company insiders. Comparatively, 7.3% of Farmers & Merchants Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
OptimumBank	19.62%	14.10%	1.31%
Farmers & Merchants Bancorp	20.27%	10.72%	1.16%

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for OptimumBank and Farmers & Merchants Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
OptimumBank	0	0	3	1	3.25
Farmers & Merchants Bancorp	0	2	1	1	2.75

OptimumBank currently has a consensus target price of $6.67, indicating a potential downside of 23.68%. Farmers & Merchants Bancorp has a consensus target price of $32.25, indicating a potential downside of 6.05%. Given Farmers & Merchants Bancorp’s higher possible upside, analysts clearly believe Farmers & Merchants Bancorp is more favorable than OptimumBank.

Summary

Farmers & Merchants Bancorp beats OptimumBank on 9 of the 14 factors compared between the two stocks.

About OptimumBank

OptimumBank Holdings, Inc. operates as the bank holding company for OptimumBank that provides various consumer and commercial banking services to individuals and businesses. It accepts demand interest-bearing and noninterest-bearing, savings, money market, and NOW accounts, as well as time deposits, wire transfers, ACH services, and certificates of deposit. The company also offers residential and commercial real estate, multi-family real estate, land and construction loans; commercial loans are generally used for working capital purposes or for acquiring equipment, inventory, and furniture; and consumer loans for various purposes, including purchases of automobiles, recreational vehicles, boats, home improvements, lines of credit, personal, and deposit account collateralized loans. In addition, it provides Visa debit and ATM cards; cash management, notary, and night depository services; and direct deposits, money orders, cashier's checks, domestic collections, and banking by mail, as well as internet banking services. The company was founded in 2000 and is based in Fort Lauderdale, Florida.

About Farmers & Merchants Bancorp

Farmers & Merchants Bancorp, Inc. is a bank holding company, which engages in the provision of commercial banking, retail banking, and financial services. It includes commercial, agricultural, and residential mortgages as well as consumer and credit card lending activities. The firm also offers checking account services, and savings and time deposit services. The company was founded in 1985 and is headquartered in Archbold, OH.