Head-To-Head Contrast: University Bancorp (OTCMKTS:UNIB) & Farmers & Merchants Bancorp (NASDAQ:FMAO)

Farmers & Merchants Bancorp (NASDAQ:FMAO) and University Bancorp (OTCMKTS:UNIB) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, dividends, profitability, analyst recommendations, valuation, institutional ownership and earnings.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Farmers & Merchants Bancorp	0	2	0	0	2.00
University Bancorp	0	0	0	0	0.00

Risk and Volatility

Farmers & Merchants Bancorp has a beta of 0.84, suggesting that its stock price is 16% less volatile than the S&P 500. Comparatively, University Bancorp has a beta of 0.18, suggesting that its stock price is 82% less volatile than the S&P 500.

Insider & Institutional Ownership

24.0% of Farmers & Merchants Bancorp shares are owned by institutional investors. 7.3% of Farmers & Merchants Bancorp shares are owned by insiders. Comparatively, 63.7% of University Bancorp shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Farmers & Merchants Bancorp	$112.41 million	3.09	$25.94 million	$2.32	10.90
University Bancorp	$125.26 million	N/A	$10.47 million	N/A	N/A

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Farmers & Merchants Bancorp	17.03%	9.16%	0.95%
University Bancorp	N/A	N/A	N/A

Dividends

Farmers & Merchants Bancorp pays an annual dividend of $0.92 per share and has a dividend yield of 3.6%. University Bancorp pays an annual dividend of $0.30 per share and has a dividend yield of 1.5%. Farmers & Merchants Bancorp pays out 39.7% of its earnings in the form of a dividend. Farmers & Merchants Bancorp has raised its dividend for 19 consecutive years. Farmers & Merchants Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Farmers & Merchants Bancorp beats University Bancorp on 9 of the 12 factors compared between the two stocks.

About Farmers & Merchants Bancorp

Farmers & Merchants Bancorp, Inc. is a bank holding company, which engages in the provision of commercial banking, retail banking, and financial services. It includes commercial, agricultural, and residential mortgages as well as consumer and credit card lending activities. The firm also offers checking account services, and savings and time deposit services. The company was founded in 1985 and is headquartered in Archbold, OH.

About University Bancorp

University Bancorp, Inc. operates as the bank holding company for University Bank that provides various personal, business, and community banking services in the United States. It offers checking, NOW, savings, money market, time deposit, and certificates of deposit accounts. The company's consumer loans include home equity, short term, automobile, personal, and recreational vehicle loans, as well as home equity lines of credits; SBA, commercial real estate, equipment, home improvement, and other instalment loans; and non-profit loans, as well as working capital lines of credit. In addition, the company provides foreign currency exchange; reverse mortgage; online banking and bill pay; online reorder checks; wire transfer; and courier services, as well as credit card and ATM services. Further, it offers life, health, property, and casualty insurance products, as well as investment products, including annuities. University Bancorp, Inc. was founded in 1890 and is based in Ann Arbor, Michigan.