Critical Review: First Farmers and Merchants (OTCMKTS:FFMH) vs. Hilltop (NYSE:HTH)

Hilltop (NYSE:HTH) and First Farmers and Merchants (OTCMKTS:FFMH) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, valuation, risk, profitability, dividends, earnings and analyst recommendations.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Hilltop and First Farmers and Merchants, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hilltop	0	3	1	1	2.60
First Farmers and Merchants	0	0	0	0	0.00

Hilltop currently has a consensus price target of $40.00, suggesting a potential upside of 0.97%. Given Hilltop’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Hilltop is more favorable than First Farmers and Merchants.

Insider and Institutional Ownership

57.1% of Hilltop shares are owned by institutional investors. 5.4% of Hilltop shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Hilltop and First Farmers and Merchants”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hilltop	$1.63 billion	1.40	$165.59 million	$2.70	14.67
First Farmers and Merchants	N/A	N/A	N/A	N/A	N/A

Hilltop has higher revenue and earnings than First Farmers and Merchants.

Profitability

This table compares Hilltop and First Farmers and Merchants’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hilltop	10.17%	7.40%	1.02%
First Farmers and Merchants	N/A	N/A	N/A

Summary

Hilltop beats First Farmers and Merchants on 10 of the 10 factors compared between the two stocks.

About Hilltop

Hilltop Holdings Inc. provides business and consumer banking services. It operates through three segments: Banking, Broker-Dealer, and Mortgage Origination. The Banking segment offers savings, checking, interest-bearing checking, and money market accounts; certificates of deposit; lines and letters of credit, home improvement and equity loans, loans for purchasing and carrying securities, term, agricultural and commercial real estate, equipment loans, and other lending products; and mortgage, commercial and industrial loans, and term and construction finance. It also provides treasury management, asset management, check cards, safe deposit boxes, online banking, bill pay, and overdraft privilege services; and estate planning, management and administration, investment portfolio management, employee benefit accounts, and individual retirement accounts services, as well as automated teller machines. The Broker-Dealer segment offers public finance services that assist public entities in originating, syndicating, and distributing securities of municipalities and political subdivisions; specialized advisory and investment banking services; advice and guidance to arbitrage rebate compliance, portfolio management, and local government investment pool administration; advisory services and products for derivatives and commodities; agricultural insurance; and sells, trades in, and underwrites U.S. government and government agency bonds, corporate bonds, and municipal bonds; mortgage-backed, asset-backed, and commercial mortgage-backed securities and structured products; and provides asset and liability management advisory, clearing, retail, and securities lending services. The Mortgage Origination segment offers fixed and adjustable rate mortgages, jumbo, new construction, Federal Housing Administration, Veterans Affairs, and United States Department of Agriculture loans. Hilltop Holdings Inc. was incorporated in 1998 and is based in Dallas, Texas.

About First Farmers and Merchants

First Farmers and Merchants Corporation operates as the bank holding company for First Farmers and Merchants Bank that provides various banking and financial services in Middle Tennessee and Northern Alabama. The company's deposit products include personal and business checking and savings, and individual retirement and investment accounts, as well as certificates of deposit. Its loan portfolio comprises personal mortgages; home equity lines of credit; debit and credit cards; personal, auto, and farmer loans; and business loans, such as commercial mortgages, equipment lending and leasing, construction lending, accounts receivable financing, lines of credit, and other products. The company also offers wealth management services, such as trust and investment services; and treasury management solutions, which include accounts receivable and payable, fraud prevention, and account management solutions, as well as online and mobile banking services. The company was founded in 1909 and is based in Columbia, Tennessee.