Farmers & Merchants Bancorp (NASDAQ:FMAO) & Glacier Bancorp (NYSE:GBCI) Critical Review

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

Earnings and Valuation

This table compares Glacier Bancorp 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
Glacier Bancorp	$1.44 billion	4.24	$239.03 million	$2.44	19.20
Farmers & Merchants Bancorp	$190.68 million	2.54	$33.31 million	$2.91	12.10

Glacier Bancorp has higher revenue and earnings than Farmers & Merchants Bancorp. Farmers & Merchants Bancorp is trading at a lower price-to-earnings ratio than Glacier Bancorp, indicating that it is currently the more affordable of the two stocks.

Dividends

Glacier Bancorp pays an annual dividend of $1.32 per share and has a dividend yield of 2.8%. Farmers & Merchants Bancorp pays an annual dividend of $0.92 per share and has a dividend yield of 2.6%. Glacier Bancorp pays out 54.1% of its earnings in the form of a dividend. Farmers & Merchants Bancorp pays out 31.6% 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. Farmers & Merchants Bancorp has raised its dividend for 19 consecutive years.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Glacier Bancorp	19.72%	7.97%	1.05%
Farmers & Merchants Bancorp	20.27%	10.72%	1.16%

Volatility & Risk

Glacier Bancorp has a beta of 0.72, indicating that its stock price is 28% less volatile than the S&P 500. Comparatively, Farmers & Merchants Bancorp has a beta of 0.8, indicating that its stock price is 20% less volatile than the S&P 500.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Glacier Bancorp	1	2	5	0	2.50
Farmers & Merchants Bancorp	0	2	1	1	2.75

Glacier Bancorp currently has a consensus target price of $55.17, suggesting a potential upside of 17.78%. Farmers & Merchants Bancorp has a consensus target price of $32.25, suggesting a potential downside of 8.42%. Given Glacier Bancorp’s higher possible upside, equities research analysts clearly believe Glacier Bancorp is more favorable than Farmers & Merchants Bancorp.

Institutional & Insider Ownership

80.2% of Glacier Bancorp shares are owned by institutional investors. Comparatively, 24.0% of Farmers & Merchants Bancorp shares are owned by institutional investors. 0.5% of Glacier Bancorp 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, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Farmers & Merchants Bancorp beats Glacier Bancorp on 10 of the 18 factors compared between the two stocks.

About Glacier Bancorp

Glacier Bancorp, Inc. operates as the bank holding company for Glacier Bank that provides commercial banking services to individuals, small to medium-sized businesses, community organizations, and public entities in the United States. It offers non-interest bearing deposit and interest bearing deposit accounts, such as negotiable order of withdrawal and demand deposit accounts, savings accounts, money market deposit accounts, fixed rate certificates of deposit, negotiated-rate jumbo certificates, and individual retirement accounts. The company also provides construction and permanent loans on residential real estate; consumer land or lot acquisition loans; unimproved land and land development loans; and residential builder guidance lines comprising pre-sold and spec-home construction, and lot acquisition loans. In addition, it offers commercial real estate loans to purchase, construct, and finance commercial real estate properties; consumer loans secured by real estate, automobiles, or other assets; paycheck protection program loans; home equity loans consisting of junior lien mortgages, and first and junior lien lines of credit secured by owner-occupied 1-4 family residences; and agriculture loans. Further, the company provides mortgage origination and loan servicing services. It has 224 locations, including 188 branches and 36 loan or administration offices in 75 counties within 8 states comprising Montana, Idaho, Utah, Washington, Wyoming, Colorado, Arizona, and Nevada. The company was founded in 1955 and is headquartered in Kalispell, Montana.

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.