Analyzing Svenska Handelsbanken AB (publ) (OTCMKTS:SVNLY) & Farmers & Merchants Bancorp (OTCMKTS:FMCB)

Svenska Handelsbanken AB (publ) (OTCMKTS:SVNLY) and Farmers & Merchants Bancorp (OTCMKTS:FMCB) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, risk, valuation, dividends, analyst recommendations, earnings and profitability.

Profitability

This table compares Svenska Handelsbanken AB (publ) and Farmers & Merchants Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Svenska Handelsbanken AB (publ)	14.89%	13.86%	0.72%
Farmers & Merchants Bancorp	30.22%	15.22%	1.62%

Analyst Recommendations

This is a breakdown of recent ratings for Svenska Handelsbanken AB (publ) and Farmers & Merchants Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Svenska Handelsbanken AB (publ)	1	0	0	0	1.00
Farmers & Merchants Bancorp	0	0	0	0	0.00

Valuation & Earnings

This table compares Svenska Handelsbanken AB (publ) and Farmers & Merchants Bancorp”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Svenska Handelsbanken AB (publ)	$17.44 billion	N/A	$2.74 billion	$0.65	9.00
Farmers & Merchants Bancorp	$292.68 million	2.43	$88.46 million	$121.02	8.39

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

Insider & Institutional Ownership

5.6% of Farmers & Merchants Bancorp shares are held by institutional investors. 8.0% of Farmers & Merchants Bancorp shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Risk and Volatility

Svenska Handelsbanken AB (publ) has a beta of 0.83, suggesting that its share price is 17% less volatile than the S&P 500. Comparatively, Farmers & Merchants Bancorp has a beta of 0.21, suggesting that its share price is 79% less volatile than the S&P 500.

Dividends

Svenska Handelsbanken AB (publ) pays an annual dividend of $0.38 per share and has a dividend yield of 6.5%. Farmers & Merchants Bancorp pays an annual dividend of $18.60 per share and has a dividend yield of 1.8%. Svenska Handelsbanken AB (publ) pays out 58.5% of its earnings in the form of a dividend. Farmers & Merchants Bancorp pays out 15.4% 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.

Summary

Farmers & Merchants Bancorp beats Svenska Handelsbanken AB (publ) on 7 of the 13 factors compared between the two stocks.

About Svenska Handelsbanken AB (publ)

Svenska Handelsbanken AB (publ) provides various banking products and services for private and corporate customers primarily in Sweden, the United Kingdom, Norway, the Netherlands, the United States, Luxembourg, Finland, and Poland. The company offers savings, transactions, business, currency, and investment accounts, as well as accounts for cash pool, and forestry and agriculture; mortgage and committed loans, and private loans; mutual funds; pension products; credit and debit cards; and payment and reconciliation services, as well as foreign exchange rate services. It also provides financing for investments, such as equipment, cars, computers, and other inventories, as well as vehicle and real estate financing services; green loans and advisor services; investment and other financing services; medical care, and group and health insurance products; forestry and farming banking products; and online and mobile banking services, as well as various banking services for children and young people. In addition, the company offers financial services, that includes asset management, transactional banking, corporate finance, financing, markets, trade finance, market information and research services to large corporations; cash management solutions; and various corporate banking services to small and medium-sized companies and large corporates, as well as private banking services. Svenska Handelsbanken AB (publ) was incorporated in 1871 and is headquartered in Stockholm, Sweden.

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.