Head to Head Review: NBT Bancorp (NASDAQ:NBTB) versus Farmers & Merchants Bancorp (OTCMKTS:FMCB)

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

Volatility & Risk

NBT Bancorp has a beta of 0.52, meaning that its share price is 48% less volatile than the S&P 500. Comparatively, Farmers & Merchants Bancorp has a beta of 0.22, meaning that its share price is 78% less volatile than the S&P 500.

Insider & Institutional Ownership

58.5% of NBT Bancorp shares are owned by institutional investors. Comparatively, 5.6% of Farmers & Merchants Bancorp shares are owned by institutional investors. 3.3% of NBT Bancorp shares are owned by insiders. Comparatively, 8.0% of Farmers & Merchants Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

NBT Bancorp pays an annual dividend of $1.36 per share and has a dividend yield of 2.9%. Farmers & Merchants Bancorp pays an annual dividend of $18.60 per share and has a dividend yield of 1.8%. NBT Bancorp pays out 45.9% 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. NBT Bancorp has raised its dividend for 12 consecutive years. NBT Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
NBT Bancorp	17.84%	9.39%	1.02%
Farmers & Merchants Bancorp	30.22%	15.22%	1.62%

Analyst Recommendations

This is a breakdown of recent recommendations for NBT Bancorp and Farmers & Merchants Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NBT Bancorp	0	2	2	1	2.80
Farmers & Merchants Bancorp	0	0	0	0	0.00

NBT Bancorp presently has a consensus target price of $51.75, suggesting a potential upside of 9.15%. Given NBT Bancorp’s stronger consensus rating and higher possible upside, equities research analysts plainly believe NBT Bancorp is more favorable than Farmers & Merchants Bancorp.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NBT Bancorp	$576.95 million	3.88	$140.64 million	$2.96	16.02
Farmers & Merchants Bancorp	$292.68 million	2.44	$88.46 million	$121.02	8.44

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

Summary

NBT Bancorp beats Farmers & Merchants Bancorp on 12 of the 18 factors compared between the two stocks.

About NBT Bancorp

NBT Bancorp Inc., a financial holding company, provides commercial banking, retail banking, and wealth management services. Its deposit products include demand deposit, savings, negotiable order of withdrawal, money market deposit, and certificate of deposit accounts. The company's loan portfolio comprises indirect and direct consumer, home equity, mortgages, business banking loans, and commercial loans; commercial and industrial, commercial real estate, agricultural, and commercial construction loans; and residential real estate loans. It also provides trust and investment services; financial planning and life insurance services; and retirement plan administration and recordkeeping services. In addition, the company offers insurance products comprising personal property and casualty, business liability, and commercial insurance, as well as other products and services through 24-hour online, mobile, and telephone channels that enable customers to check balances, make deposits, transfer funds, pay bills, access statements, apply for loans, and access various other products and services. Further, it operates as a property management and passive investment company, as well as investment advisor that provides investment management and financial consulting services. The company operates in upstate New York, northeastern Pennsylvania, southern New Hampshire, western Massachusetts, Vermont, southern Maine, and central and northwestern Connecticut. NBT Bancorp Inc. was founded in 1856 and is headquartered in Norwich, New York.

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.