Farmers & Merchants Bank of Long Beach (OTCMKTS:FMBL) and Intercorp Financial Services (NYSE:IFS) Critical Comparison

Farmers & Merchants Bank of Long Beach (OTCMKTS:FMBL) and Intercorp Financial Services (NYSE:IFS) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, profitability, valuation, analyst recommendations, earnings, risk and institutional ownership.

Analyst Ratings

This is a summary of recent ratings for Farmers & Merchants Bank of Long Beach and Intercorp Financial Services, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Farmers & Merchants Bank of Long Beach	0	0	0	0	N/A
Intercorp Financial Services	0	0	1	0	3.00

Intercorp Financial Services has a consensus price target of $30.00, suggesting a potential upside of 10.01%. Given Intercorp Financial Services’ higher probable upside, analysts clearly believe Intercorp Financial Services is more favorable than Farmers & Merchants Bank of Long Beach.

Valuation and Earnings

This table compares Farmers & Merchants Bank of Long Beach and Intercorp Financial Services”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Farmers & Merchants Bank of Long Beach	$431.97 million	1.57	$70.01 million	$485.58	11.33
Intercorp Financial Services	$6.18 billion	0.51	$286.85 million	$2.22	12.28

Intercorp Financial Services has higher revenue and earnings than Farmers & Merchants Bank of Long Beach. Farmers & Merchants Bank of Long Beach is trading at a lower price-to-earnings ratio than Intercorp Financial Services, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Farmers & Merchants Bank of Long Beach and Intercorp Financial Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Farmers & Merchants Bank of Long Beach	11.52%	3.97%	0.44%
Intercorp Financial Services	14.94%	8.97%	0.99%

Dividends

Farmers & Merchants Bank of Long Beach pays an annual dividend of $112.00 per share and has a dividend yield of 2.0%. Intercorp Financial Services pays an annual dividend of $0.95 per share and has a dividend yield of 3.5%. Farmers & Merchants Bank of Long Beach pays out 23.1% of its earnings in the form of a dividend. Intercorp Financial Services pays out 42.8% 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.

Risk and Volatility

Farmers & Merchants Bank of Long Beach has a beta of 0.42, indicating that its share price is 58% less volatile than the S&P 500. Comparatively, Intercorp Financial Services has a beta of 1.32, indicating that its share price is 32% more volatile than the S&P 500.

Insider & Institutional Ownership

7.6% of Farmers & Merchants Bank of Long Beach shares are held by institutional investors. 12.8% of Farmers & Merchants Bank of Long Beach shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Intercorp Financial Services beats Farmers & Merchants Bank of Long Beach on 10 of the 15 factors compared between the two stocks.

About Farmers & Merchants Bank of Long Beach

Farmers & Merchants Bank of Long Beach provides various banking products and services to individuals, professionals, and small to medium-sized businesses in Los Angeles, Orange, and Santa Barbara Counties. It offers checking, savings, Christmas club savings, health savings, market rate savings, and money market accounts; demand and time deposits; certificates of deposit; and individual retirement account. The company also provides personal, home, commercial real estate, real estate and construction, and commercial business loans, as well as lines of credit; financing for residential loans comprising single-family and multifamily loans; and credit and debit cards. In addition, it offers account management, receivables and payables, and risk management services; commercial lending services; and faith-based and healthcare banking services, as well as online and mobile banking services. Farmers & Merchants Bank of Long Beach was founded in 1907 and is headquartered in Long Beach, California.

About Intercorp Financial Services

Intercorp Financial Services Inc., together with its subsidiaries, offers banking, insurance, wealth management, and payment services for retail and commercial clients in Peru. The company provides loans, credit facilities, deposits, and current accounts; life annuity products with single-premium payment and conventional life insurance products, as well as other retail insurance products; and brokerage and investment management services. It engages in the development, management, operation, and processing of credit and debit cards; facilitation of payments and services through commercial stores; and installation and maintenance of infrastructure for transactions through electronic commerce modality and networks of payment methods processors. The company was incorporated in 1897 and is based in Lima, Peru. Intercorp Financial Services Inc. operates as a subsidiary of Intercorp Perú Ltd.