FinWise Bancorp (NASDAQ:FINW) and Farmers & Merchants Bancorp (NASDAQ:FMAO) Critical Contrast

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

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Farmers & Merchants Bancorp and FinWise Bancorp, as provided by MarketBeat.com.

	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 8.49%. FinWise Bancorp has a consensus target price of $15.50, indicating a potential upside of 6.97%. Given FinWise Bancorp’s higher possible upside, analysts clearly 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 hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Volatility & Risk

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

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%	9.64%	2.04%

Earnings & Valuation

This table compares Farmers & Merchants Bancorp and FinWise Bancorp”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	$190.68 million	2.66	$33.31 million	$3.11	11.86
FinWise Bancorp	$150.96 million	1.31	$16.09 million	$1.35	10.73

Farmers & Merchants Bancorp has higher revenue and earnings 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 10 of the 15 factors compared between the two stocks.

About Farmers & Merchants Bancorp

Farmers & Merchants Bancorp, Inc. is a bank holding company whose primary subsidiary, The Farmers & Merchants State Bank, provides banking services to individuals, businesses and agricultural customers. Its offerings include deposit accounts, commercial and consumer lending, mortgages and other financial services. Founded in 1897, the company is headquartered in Archbold, Ohio, and serves communities in northwest Ohio and northeast Indiana through its banking locations and digital channels.

About FinWise Bancorp

FinWise Bancorp is a bank holding company headquartered in Murray, Utah, and the parent of FinWise Bank. The bank provides consumer and business banking services, including deposit accounts and commercial lending. FinWise also works with financial technology companies and other partners to offer lending and payment-related services. While its community banking operations are based in Utah, its partner-based programs serve customers in multiple U.S. markets.