Head-To-Head Contrast: FinWise Bancorp (NASDAQ:FINW) and Farmers & Merchants Bancorp (NASDAQ:FMAO)

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

Volatility & Risk

Farmers & Merchants Bancorp has a beta of 0.76, indicating that its share price is 24% less volatile than the S&P 500. Comparatively, FinWise Bancorp has a beta of 0.7, indicating that its share price is 30% less volatile than the S&P 500.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Farmers & Merchants Bancorp	0	3	0	1	2.50
FinWise Bancorp	0	3	1	0	2.25

Farmers & Merchants Bancorp currently has a consensus target price of $33.75, indicating a potential downside of 9.01%. FinWise Bancorp has a consensus target price of $15.50, indicating a potential upside of 5.37%. Given FinWise Bancorp’s higher possible upside, analysts plainly believe FinWise Bancorp is more favorable than Farmers & Merchants Bancorp.

Insider & Institutional Ownership

24.0% of Farmers & Merchants Bancorp shares are owned by institutional investors. Comparatively, 35.4% of FinWise Bancorp shares are owned by institutional investors. 7.3% of Farmers & Merchants Bancorp shares are owned by insiders. Comparatively, 22.4% of FinWise Bancorp shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Farmers & Merchants Bancorp	21.30%	11.25%	1.22%
FinWise Bancorp	7.03%	9.78%	2.06%

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Farmers & Merchants Bancorp	$129.96 million	3.93	$33.31 million	$3.11	11.93
FinWise Bancorp	$150.96 million	1.35	$16.09 million	$1.35	10.90

Farmers & Merchants Bancorp has higher earnings, but lower revenue than FinWise Bancorp. FinWise Bancorp 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.

Summary

Farmers & Merchants Bancorp beats FinWise Bancorp on 9 of the 15 factors compared between the two stocks.

About Farmers & Merchants Bancorp

Farmers & Merchants Bancorp, Inc. is a bank holding company headquartered in Archbold, Ohio. Founded in 1897, the company operates through its principal subsidiary, The Farmers & Merchants State Bank, a community bank serving individuals, families, farmers and businesses. The bank offers a range of traditional financial services, including checking and savings accounts, certificates of deposit, consumer and residential mortgage loans, commercial lending, agricultural loans and other business banking products.

About FinWise Bancorp

FinWise Bancorp is the bank holding company for FinWise Bank, a Utah-chartered financial institution headquartered in Murray, Utah. Through its subsidiary, the company provides banking and lending services to consumers, small businesses and commercial customers. FinWise Bank operates a strategic lending platform that partners with fintech companies, loan originators and other third parties to support the origination and servicing of consumer and small-business loans. Its offerings also include commercial lending, small business lending, Small Business Administration loans, commercial real estate financing and other credit products.