Head-To-Head Comparison: Farmers National Banc (NASDAQ:FMNB) & Ames National (NASDAQ:ATLO)

Farmers National Banc (NASDAQ:FMNB) and Ames National (NASDAQ:ATLO) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, valuation, analyst recommendations, institutional ownership, earnings, dividends and profitability.

Profitability

This table compares Farmers National Banc and Ames National’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Farmers National Banc	19.55%	11.99%	1.13%
Ames National	21.63%	10.65%	1.02%

Dividends

Farmers National Banc pays an annual dividend of $0.68 per share and has a dividend yield of 4.6%. Ames National pays an annual dividend of $0.96 per share and has a dividend yield of 3.2%. Farmers National Banc pays out 46.9% of its earnings in the form of a dividend. Ames National pays out 39.7% 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.

Valuation & Earnings

This table compares Farmers National Banc and Ames National”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Farmers National Banc	$279.92 million	3.15	$54.59 million	$1.45	10.26
Ames National	$98.26 million	2.75	$19.03 million	$2.42	12.58

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

Analyst Ratings

This is a summary of current ratings and recommmendations for Farmers National Banc and Ames National, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Farmers National Banc	0	2	1	0	2.33
Ames National	0	2	1	0	2.33

Farmers National Banc presently has a consensus price target of $16.00, indicating a potential upside of 7.53%. Ames National has a consensus price target of $31.00, indicating a potential upside of 1.81%. Given Farmers National Banc’s higher possible upside, equities research analysts clearly believe Farmers National Banc is more favorable than Ames National.

Risk and Volatility

Farmers National Banc has a beta of 0.77, indicating that its share price is 23% less volatile than the S&P 500. Comparatively, Ames National has a beta of 0.3, indicating that its share price is 70% less volatile than the S&P 500.

Institutional & Insider Ownership

38.7% of Farmers National Banc shares are held by institutional investors. Comparatively, 26.5% of Ames National shares are held by institutional investors. 3.5% of Farmers National Banc shares are held by insiders. Comparatively, 2.3% of Ames National shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Farmers National Banc beats Ames National on 10 of the 14 factors compared between the two stocks.

About Farmers National Banc

Farmers National Banc Corp. operates as a bank holding company for The Farmers National Bank of Canfield engages in the banking, trust, retirement consulting, insurance, and financial management businesses. It offers commercial and retail banking services, including checking, savings, and time deposit accounts; commercial, mortgage and installment, and home equity loans; home equity lines of credit, night depository, safe deposit box, money order, bank check, automated teller machine, Internet banking, travel card, E bond transaction, brokerage, and other services. The company also provides personal and corporate trust services in the areas of estate settlement, trust administration, employee benefit plans, and retirement services; property and casualty insurance products and services; and various insurance products through licensed representatives, as well as invests in municipal securities. The company was founded in 1887 and is headquartered in Canfield, Ohio.

About Ames National

Ames National Corporation operates as a multi-bank holding company that provides banking products and services primarily in Boone, Clarke, Hancock, Marshall, Polk, Story, and Union counties in central, north central, and south-central Iowa. The company accepts various deposit products, including checking and savings accounts; and time deposits, such as money market accounts and certificates of deposit. It also provides loans, such as short-term and medium-term commercial and agricultural real estate, residential real estate loans, equipment, vehicle, and home improvement loans; consumer loans to finance consumer purchases, such as automobiles, trucks, recreational vehicles, household furnishings, boats, personal loans, and lines of credit; agricultural and business operating loans and lines of credit; and originates mortgage loans for sale into the secondary market. In addition, the company offers cash management, merchant credit card processing, safe deposit box, wire transfer, direct deposit, and automated/video teller machine access services; and automatic drafts for various accounts, as well as wealth management services. Further, it provides farm management, investment, and custodial services for individuals, businesses, and non-profit organizations; and online, mobile, and private banking services. Ames National Corporation was incorporated in 1903 and is headquartered in Ames, Iowa.