F & M Bank (OTCMKTS:FMBM – Get Free Report) and Hawthorn Bancshares (NASDAQ:HWBK – Get Free Report) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, profitability, analyst recommendations, earnings, risk, valuation and dividends.
Profitability
This table compares F & M Bank and Hawthorn Bancshares’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| F & M Bank | 14.96% | 11.77% | 0.88% |
| Hawthorn Bancshares | 22.14% | 15.01% | 1.33% |
Analyst Ratings
This is a summary of current recommendations and price targets for F & M Bank and Hawthorn Bancshares, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| F & M Bank | 0 | 0 | 0 | 0 | 0.00 |
| Hawthorn Bancshares | 0 | 0 | 1 | 0 | 3.00 |
Valuation & Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| F & M Bank | $78.92 million | 1.80 | $11.23 million | $3.38 | 11.70 |
| Hawthorn Bancshares | $111.97 million | 2.40 | $23.80 million | $3.64 | 10.69 |
Hawthorn Bancshares has higher revenue and earnings than F & M Bank. Hawthorn Bancshares is trading at a lower price-to-earnings ratio than F & M Bank, indicating that it is currently the more affordable of the two stocks.
Dividends
F & M Bank pays an annual dividend of $1.04 per share and has a dividend yield of 2.6%. Hawthorn Bancshares pays an annual dividend of $0.84 per share and has a dividend yield of 2.2%. F & M Bank pays out 30.8% of its earnings in the form of a dividend. Hawthorn Bancshares pays out 23.1% 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. Hawthorn Bancshares has increased its dividend for 5 consecutive years.
Risk & Volatility
F & M Bank has a beta of 0.3, indicating that its stock price is 70% less volatile than the S&P 500. Comparatively, Hawthorn Bancshares has a beta of 0.44, indicating that its stock price is 56% less volatile than the S&P 500.
Institutional and Insider Ownership
3.8% of F & M Bank shares are held by institutional investors. Comparatively, 30.7% of Hawthorn Bancshares shares are held by institutional investors. 10.6% of F & M Bank shares are held by company insiders. Comparatively, 22.9% of Hawthorn Bancshares shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Summary
Hawthorn Bancshares beats F & M Bank on 14 of the 16 factors compared between the two stocks.
About F & M Bank
F & M Bank Corp. operates as the bank holding company for Farmers & Merchants Bank that provides financial products and services to consumers and businesses in Virginia. The company offers commercial and individual demand and time deposit accounts, savings accounts, money market accounts, internet and mobile banking services, and drive-in banking services. It also provides construction loans, including residential, and land acquisition and development loans; commercial real estate loans; business loans; consumer loans, such as personal loans, automobile loans, deposit account loans, installment and demand loans, and home equity loans; residential mortgage loans; credit cards; dealer finance; farmland loans; multi-family loans; and commercial and industrial loans. In addition, the company offers brokerage services and commercial and personal insurance products. Further, it originates conventional and government agency sponsored mortgages; and offers title insurance and real estate settlement services. The company was founded in 1908 and is headquartered in Timberville, Virginia.
About Hawthorn Bancshares
Hawthorn Bancshares, Inc. operates as the bank holding company for Hawthorn Bank that provides various banking services in the United States. It accepts checking, savings, money market, individual retirement, and other time deposit accounts, as well as certificates of deposit. The company also offers commercial and industrial, single payment personal, installment, commercial and residential real estate, and consumer loans, as well as equipment, operating, and small business administration loans; and debit and credit cards. In addition, it provides trust services that include estate planning, investment, and asset management services; and cash management, safety deposit box, brokerage, and Internet banking services. Hawthorn Bancshares, Inc. was founded in 1865 and is headquartered in Jefferson City, Missouri.
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