Dime Community Bancshares (NASDAQ:DCOM) and Farmers & Merchants Bancorp (OTCMKTS:FMCB) Head to Head Contrast

Farmers & Merchants Bancorp (OTCMKTS:FMCB) and Dime Community Bancshares (NASDAQ:DCOM) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, valuation, analyst recommendations and dividends.

Institutional and Insider Ownership

5.6% of Farmers & Merchants Bancorp shares are owned by institutional investors. Comparatively, 75.3% of Dime Community Bancshares shares are owned by institutional investors. 8.0% of Farmers & Merchants Bancorp shares are owned by insiders. Comparatively, 9.1% of Dime Community Bancshares shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current recommendations and price targets for Farmers & Merchants Bancorp and Dime Community Bancshares, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Farmers & Merchants Bancorp	0	0	0	0	0.00
Dime Community Bancshares	0	0	3	1	3.25

Dime Community Bancshares has a consensus price target of $38.50, suggesting a potential upside of 35.71%. Given Dime Community Bancshares’ stronger consensus rating and higher possible upside, analysts clearly believe Dime Community Bancshares is more favorable than Farmers & Merchants Bancorp.

Earnings and Valuation

This table compares Farmers & Merchants Bancorp and Dime Community Bancshares”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Farmers & Merchants Bancorp	$292.68 million	2.40	$88.46 million	$121.02	8.28
Dime Community Bancshares	$314.10 million	3.94	$29.08 million	$0.59	48.08

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

Profitability

This table compares Farmers & Merchants Bancorp and Dime Community Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Farmers & Merchants Bancorp	30.22%	15.22%	1.62%
Dime Community Bancshares	4.50%	5.43%	0.46%

Risk & Volatility

Farmers & Merchants Bancorp has a beta of 0.21, indicating that its stock price is 79% less volatile than the S&P 500. Comparatively, Dime Community Bancshares has a beta of 1.04, indicating that its stock price is 4% more volatile than the S&P 500.

Dividends

Farmers & Merchants Bancorp pays an annual dividend of $18.60 per share and has a dividend yield of 1.9%. Dime Community Bancshares pays an annual dividend of $1.00 per share and has a dividend yield of 3.5%. Farmers & Merchants Bancorp pays out 15.4% of its earnings in the form of a dividend. Dime Community Bancshares pays out 169.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Dime Community Bancshares beats Farmers & Merchants Bancorp on 11 of the 17 factors compared between the two stocks.

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.

About Dime Community Bancshares

Dime Community Bancshares, Inc. operates as the holding company for Dime Community Bank that engages in the provision of various commercial banking and financial services. The company accepts time, savings, and demand deposits from the businesses, consumers, and local municipalities. It also offers commercial real estate loans; multi-family mortgage loans; residential mortgage loans; letters of credit; secured and unsecured commercial and consumer loans; lines of credit; home equity loans; and construction and land loans. In addition, the company invests in Federal Home Loan Bank, Federal National Mortgage Association, Government National Mortgage Association, and Federal Home Loan Mortgage Corporation mortgage-backed securities, collateralized mortgage obligations, and other asset backed securities; U.S. Treasury securities; New York state and local municipal obligations; U.S. government-sponsored enterprise securities; and corporate bonds. Further, it offers certificate of deposit account registry services and insured cash sweep programs; federal deposit insurance corporation insurance; merchant credit and debit card processing, automated teller machines, cash management services, lockbox processing, online banking services, remote deposit capture, safe deposit boxes, and individual retirement accounts; investment products and services through a third-party broker dealer; and title insurance broker services for small and medium sized businesses, and municipal and consumer relationships. The company was founded in 1910 and is headquartered in Hauppauge, New York.