Reviewing Equitable Financial (OTCMKTS:EQFN) and First Merchants (NASDAQ:FRME)

Equitable Financial (OTCMKTS:EQFN) and First Merchants (NASDAQ:FRME) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their valuation, earnings, risk, dividends, institutional ownership, analyst recommendations and profitability.

Insider & Institutional Ownership

7.2% of Equitable Financial shares are owned by institutional investors. Comparatively, 73.9% of First Merchants shares are owned by institutional investors. 11.3% of Equitable Financial shares are owned by insiders. Comparatively, 1.4% of First Merchants shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Equitable Financial and First Merchants”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Equitable Financial	$33.95 million	1.18	$3.44 million	$1.31	12.34
First Merchants	$1.05 billion	2.41	$226.00 million	$3.89	10.28

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

Profitability

This table compares Equitable Financial and First Merchants’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Equitable Financial	9.70%	6.57%	0.64%
First Merchants	21.49%	9.58%	1.21%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Equitable Financial and First Merchants, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Equitable Financial	0	0	0	0	0.00
First Merchants	0	3	3	0	2.50

First Merchants has a consensus target price of $48.33, indicating a potential upside of 20.83%. Given First Merchants’ stronger consensus rating and higher probable upside, analysts clearly believe First Merchants is more favorable than Equitable Financial.

Volatility & Risk

Equitable Financial has a beta of 0.08, suggesting that its share price is 92% less volatile than the S&P 500. Comparatively, First Merchants has a beta of 0.88, suggesting that its share price is 12% less volatile than the S&P 500.

Summary

First Merchants beats Equitable Financial on 12 of the 14 factors compared between the two stocks.

About Equitable Financial

Equitable Financial Corp. operates as the holding company for Equitable Bank that provides various banking products and services in Nebraska, the United States. The company offers checking and savings accounts; recorder checks; online and mobile banking; remote deposit capture; voice banking; credit card processing; debit and gift cards; and safe deposit boxes. It also provides home, home equity, auto, personal, real estate and construction, operating lines of credit, small business administration, and agricultural loans, as well as equipment financing. In addition, the company offers foreign currency and exchanges; financial planning; wealth management; investment advisory; and retirement services. It operates through branches located in Grand Island, North Platte, and Omaha. The company was founded in 1882 and is headquartered in Grand Island, Nebraska.

About First Merchants

First Merchants Corporation operates as the financial holding company for First Merchants Bank that provides community banking services. The company offers a range of financial services, including time, savings, and demand deposits; and consumer, commercial, agri-business, public finance, and real estate mortgage loans. It also provides personal and corporate trust; brokerage and private wealth management; and letters of credit, repurchase agreements, and other corporate services. The company operates banking locations in Indiana, Illinois, Ohio, and Michigan counties. It also offers its services through electronic and mobile delivery channels. First Merchants Corporation was founded in 1893 and is headquartered in Muncie, Indiana.