Head-To-Head Review: Farmers & Merchants Bancorp (NASDAQ:FMAO) & Camden National (NASDAQ:CAC)

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

Risk & Volatility

Camden National has a beta of 0.54, meaning that its share price is 46% less volatile than the S&P 500. Comparatively, Farmers & Merchants Bancorp has a beta of 0.8, meaning that its share price is 20% less volatile than the S&P 500.

Institutional and Insider Ownership

77.4% of Camden National shares are held by institutional investors. Comparatively, 24.0% of Farmers & Merchants Bancorp shares are held by institutional investors. 2.1% of Camden National shares are held by company insiders. Comparatively, 7.3% of Farmers & Merchants Bancorp shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Camden National and Farmers & Merchants Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Camden National	0	4	2	0	2.33
Farmers & Merchants Bancorp	0	3	1	0	2.25

Camden National presently has a consensus target price of $56.50, suggesting a potential upside of 1.57%. Farmers & Merchants Bancorp has a consensus target price of $32.25, suggesting a potential downside of 6.78%. Given Camden National’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Camden National is more favorable than Farmers & Merchants Bancorp.

Dividends

Camden National pays an annual dividend of $1.68 per share and has a dividend yield of 3.0%. Farmers & Merchants Bancorp pays an annual dividend of $0.92 per share and has a dividend yield of 2.7%. Camden National pays out 32.2% of its earnings in the form of a dividend. Farmers & Merchants Bancorp pays out 31.6% 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. Farmers & Merchants Bancorp has increased its dividend for 19 consecutive years.

Valuation & Earnings

This table compares Camden National and Farmers & Merchants Bancorp”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Camden National	$373.18 million	2.52	$65.16 million	$5.22	10.66
Farmers & Merchants Bancorp	$190.68 million	2.50	$33.31 million	$2.91	11.89

Camden National has higher revenue and earnings than Farmers & Merchants Bancorp. Camden National 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Camden National	23.64%	12.59%	1.27%
Farmers & Merchants Bancorp	20.27%	10.72%	1.16%

Summary

Camden National beats Farmers & Merchants Bancorp on 12 of the 17 factors compared between the two stocks.

About Camden National

Camden National Corporation operates as the bank holding company for Camden National Bank that provides various commercial and consumer banking products and services for consumer, institutional, municipal, non-profit, and commercial customers in Maine, New Hampshire, and Massachusetts. The company accepts checking, savings, time, and brokered deposits, as well as deposits with the certificate of deposit account registry system. Its loan products include non-owner-occupied commercial estate loans, owner-occupied commercial real estate loans, unsecured fully-guaranteed commercial loans backed by the small business administration, loans secured by one-to four-family properties, and consumer and home equity loans. The company also provides brokerage and insurance services through its financial offerings consisting of college, retirement, estate planning, mutual funds, strategic asset management accounts, and variable and fixed annuities. Further, it offers a range of fiduciary and asset management, wealth management, investment management, financial planning, and trustee services. Camden National Corporation was founded in 1875 and is headquartered in Camden, Maine.

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.