Bank of America (BAC) versus Farmers And Merchants Bank of Long Beach (FMBL) Critical Contrast

Farmers And Merchants Bank of Long Beach (OTCMKTS:FMBL) and Bank of America (NYSE:BAC) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, earnings, dividends, institutional ownership, risk, profitability and valuation.

Dividends

Farmers And Merchants Bank of Long Beach pays an annual dividend of $108.00 per share and has a dividend yield of 1.3%. Bank of America pays an annual dividend of $0.60 per share and has a dividend yield of 2.1%. Bank of America pays out 23.0% of its earnings in the form of a dividend. Bank of America has raised its dividend for 5 consecutive years. Bank of America is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

5.8% of Farmers And Merchants Bank of Long Beach shares are held by institutional investors. Comparatively, 65.2% of Bank of America shares are held by institutional investors. 12.8% of Farmers And Merchants Bank of Long Beach shares are held by company insiders. Comparatively, 0.2% of Bank of America shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Farmers And Merchants Bank of Long Beach and Bank of America’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Farmers And Merchants Bank of Long Beach 29.79% 28.14% 2.68%
Bank of America 25.42% 11.79% 1.22%

Valuation and Earnings

This table compares Farmers And Merchants Bank of Long Beach and Bank of America’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Farmers And Merchants Bank of Long Beach $279.16 million 3.73 $45.53 million N/A N/A
Bank of America $110.58 billion 2.65 $28.15 billion $2.61 10.97

Bank of America has higher revenue and earnings than Farmers And Merchants Bank of Long Beach.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Farmers And Merchants Bank of Long Beach and Bank of America, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Farmers And Merchants Bank of Long Beach 0 0 0 0 N/A
Bank of America 0 9 6 0 2.40

Bank of America has a consensus target price of $33.07, indicating a potential upside of 15.56%. Given Bank of America’s higher probable upside, analysts plainly believe Bank of America is more favorable than Farmers And Merchants Bank of Long Beach.

Risk and Volatility

Farmers And Merchants Bank of Long Beach has a beta of 0.38, indicating that its share price is 62% less volatile than the S&P 500. Comparatively, Bank of America has a beta of 1.49, indicating that its share price is 49% more volatile than the S&P 500.

Summary

Bank of America beats Farmers And Merchants Bank of Long Beach on 8 of the 15 factors compared between the two stocks.

Farmers And Merchants Bank of Long Beach Company Profile

Farmers & Merchants Bank of Long Beach provides various banking products and services to individuals, professionals, and small to medium-sized businesses in California. The company's products and services include demand and time deposits; commercial real estate, construction, and commercial business loans; and financing for residential loans comprising single-family and multifamily loans. Its personal banking products and services include checking, savings, Christmas club, health savings, money market, and CD accounts; retirement plans, online and mobile banking, and other services; and credit and loans, such as credit cards, home loans, and escrow services. The company's business banking products and services comprise banking services, business checking, money market accounts, retirement plans, business savings, CDs, online banking, mobile banking, merchant services, payroll services, deposit lockbox, remote deposit capture, and other services; and credit and loans, including business credit cards, small business loans, commercial loans, real estate and construction loans, and lines of credit. As of December 31, 2017, it operated 24 branches in Los Angeles County and Orange County. The company was founded in 1907 and is headquartered in Long Beach, California. Farmers & Merchants Bank of Long Beach is a subsidiary of Palomar Enterprises, LLC.

Bank of America Company Profile

Bank of America Corporation, through its subsidiaries, provides banking and financial products and services for individual consumers, small- and middle-market businesses, institutional investors, large corporations, and governments worldwide. It operates through four segments: Consumer Banking, Global Wealth & Investment Management (GWIM), Global Banking, and Global Markets. The Consumer Banking segment offers traditional and money market savings accounts, CDs and IRAs, noninterest- and interest-bearing checking accounts, and investment accounts and products; and credit and debit cards, residential mortgages, and home equity loans, as well as direct and indirect loans, such as automotive, recreational vehicle, and consumer personal loans. This segment provides its products and services through approximately 4,300 financial centers; 16,300 ATMs; call centers; and digital banking platforms. The GWIM segment offers investment management, brokerage, banking, and trust and retirement products; and wealth management solutions targeted to high net worth and ultra high net worth clients, as well as customized solutions to meet clients' wealth structuring, investment management, and trust and banking needs, including specialty asset management services. The Global Banking segment provides lending products and services, including commercial loans, leases, commitment facilities, trade finance, and real estate and asset-based lending; treasury solutions, such as treasury management, foreign exchange, and short-term investing options; working capital management solutions; and debt and equity underwriting and distribution, and merger-related and other advisory services. The Global Markets segment offers market-making, financing, securities clearing, settlement, and custody services, as well as risk management, foreign exchange, fixed-income, and mortgage-related products. Bank of America Corporation was founded in 1874 and is headquartered in Charlotte, North Carolina.

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