Lakeland Financial (NASDAQ:LKFN – Get Free Report) and Farmers & Merchants Bancorp (NASDAQ:FMAO – Get Free Report) are both small-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, institutional ownership, earnings, dividends, analyst recommendations, valuation and profitability.
Dividends
Lakeland Financial pays an annual dividend of $2.08 per share and has a dividend yield of 3.6%. Farmers & Merchants Bancorp pays an annual dividend of $0.96 per share and has a dividend yield of 2.7%. Lakeland Financial pays out 47.7% of its earnings in the form of a dividend. Farmers & Merchants Bancorp pays out 33.0% 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. Lakeland Financial has raised its dividend for 14 consecutive years and Farmers & Merchants Bancorp has raised its dividend for 19 consecutive years.
Valuation and Earnings
This table compares Lakeland Financial and Farmers & Merchants Bancorp”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Lakeland Financial | $279.40 million | 5.09 | $103.36 million | $4.36 | 13.13 |
| Farmers & Merchants Bancorp | $190.68 million | 2.54 | $33.31 million | $2.91 | 12.08 |
Lakeland Financial has higher revenue and earnings than Farmers & Merchants Bancorp. Farmers & Merchants Bancorp is trading at a lower price-to-earnings ratio than Lakeland Financial, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a summary of current ratings and price targets for Lakeland Financial and Farmers & Merchants Bancorp, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Lakeland Financial | 0 | 3 | 1 | 0 | 2.25 |
| Farmers & Merchants Bancorp | 0 | 3 | 1 | 0 | 2.25 |
Lakeland Financial presently has a consensus price target of $66.50, indicating a potential upside of 16.18%. Farmers & Merchants Bancorp has a consensus price target of $32.25, indicating a potential downside of 8.22%. Given Lakeland Financial’s higher probable upside, analysts plainly believe Lakeland Financial is more favorable than Farmers & Merchants Bancorp.
Insider & Institutional Ownership
81.2% of Lakeland Financial shares are owned by institutional investors. Comparatively, 24.0% of Farmers & Merchants Bancorp shares are owned by institutional investors. 3.0% of Lakeland Financial shares are owned by company insiders. Comparatively, 7.3% of Farmers & Merchants Bancorp shares are owned by company 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.
Risk & Volatility
Lakeland Financial has a beta of 0.77, suggesting that its stock price is 23% less volatile than the S&P 500. Comparatively, Farmers & Merchants Bancorp has a beta of 0.81, suggesting that its stock price is 19% less volatile than the S&P 500.
Profitability
This table compares Lakeland Financial and Farmers & Merchants Bancorp’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Lakeland Financial | 26.04% | 14.67% | 1.58% |
| Farmers & Merchants Bancorp | 20.27% | 10.72% | 1.16% |
Summary
Lakeland Financial beats Farmers & Merchants Bancorp on 11 of the 15 factors compared between the two stocks.
About Lakeland Financial
Lakeland Financial Corporation operates as the bank holding company for Lake City Bank that provides various banking products and services in the United States. The company accepts various deposit products, such as noninterest bearing, interest-bearing checking, savings, money market, NOW, and demand deposits. Its loan products include commercial and industrial, commercial real estate and multi-family residential, construction, agri-business and agricultural, consumer 1-4 family mortgage, and other commercial and consumer loans. The company also provides retail and merchant credit card services; corporate treasury management, wealth advisory, and trust services; retail brokerage services, including various financial and investment products, such as annuities and life insurance; and mobile business banking and on-line treasury management services. It serves commercial real estate, manufacturing, agriculture, construction, retail, wholesale, finance and insurance, accommodation and food services, and health care industries. The company was founded in 1872 and is headquartered in Warsaw, Indiana.
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.
Receive News & Ratings for Lakeland Financial Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Lakeland Financial and related companies with MarketBeat.com's FREE daily email newsletter.
