Head to Head Review: Farmers & Merchants Bancorp (OTCMKTS:FMCB) & BOK Financial (NASDAQ:BOKF)

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

Risk & Volatility

Farmers & Merchants Bancorp has a beta of 0.21, meaning that its share price is 79% less volatile than the S&P 500. Comparatively, BOK Financial has a beta of 0.88, meaning that its share price is 12% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Farmers & Merchants Bancorp	30.89%	15.03%	1.65%
BOK Financial	15.98%	9.24%	1.07%

Dividends

Farmers & Merchants Bancorp pays an annual dividend of $20.20 per share and has a dividend yield of 1.8%. BOK Financial pays an annual dividend of $2.52 per share and has a dividend yield of 2.2%. Farmers & Merchants Bancorp pays out 15.4% of its earnings in the form of a dividend. BOK Financial pays out 30.0% 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. BOK Financial has increased its dividend for 20 consecutive years. BOK Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of current ratings and price targets for Farmers & Merchants Bancorp and BOK Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Farmers & Merchants Bancorp	0	0	0	0	0.00
BOK Financial	0	6	4	0	2.40

BOK Financial has a consensus target price of $115.55, indicating a potential downside of 0.37%. Given BOK Financial’s stronger consensus rating and higher possible upside, analysts plainly believe BOK Financial is more favorable than Farmers & Merchants Bancorp.

Earnings & Valuation

This table compares Farmers & Merchants Bancorp and BOK Financial”s top-line 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	2.70	$88.46 million	$130.83	8.38
BOK Financial	$3.48 billion	2.11	$523.57 million	$8.39	13.82

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

Institutional & Insider Ownership

5.6% of Farmers & Merchants Bancorp shares are held by institutional investors. Comparatively, 34.4% of BOK Financial shares are held by institutional investors. 8.5% of Farmers & Merchants Bancorp shares are held by company insiders. Comparatively, 56.9% of BOK Financial shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

BOK Financial 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 BOK Financial

BOK Financial Corporation operates as the financial holding company for BOKF, NA that provides various financial products and services in Oklahoma, Texas, New Mexico, Northwest Arkansas, Colorado, Arizona, and Kansas/Missouri. It operates through three segments: Commercial Banking, Consumer Banking, and Wealth Management. The Commercial Banking segment offers lending, treasury, cash management, and customer commodity risk management products for small businesses, middle market, and larger commercial customers, as well as operates TransFund electronic funds transfer network. The Consumer Banking segment engages in the provision of retail lending and deposit services to small business customers through retail branch network; and mortgage loan origination and servicing activities. The Wealth Management segment offers fiduciary, private bank, insurance, and investment advisory services; and brokerage and trading services primarily related to providing liquidity to the mortgage markets through trading of U.S. government agency mortgage-backed securities and related derivative contracts, as well as underwrites state and municipal securities. The company also provides commercial loans, such as loans for working capital, facilities acquisition or expansion, purchases of equipment, and other needs of commercial customers; and service, healthcare, manufacturing, wholesale/retail, energy, and other sector loans. In addition, it offers commercial real estate loans for the construction of buildings or other improvements to real estate and property held by borrowers for investment purposes; residential mortgage and personal loans; and automated teller machine, call center, and Internet and mobile banking services. The company was founded in 1910 and is headquartered in Tulsa, Oklahoma.