Analyzing Farmers & Merchants Bank of Long Beach (OTCMKTS:FMBL) & Erste Group Bank (OTCMKTS:EBKDY)

Erste Group Bank (OTCMKTS:EBKDY) and Farmers & Merchants Bank of Long Beach (OTCMKTS:FMBL) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, risk, institutional ownership, valuation, analyst recommendations and dividends.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Erste Group Bank and Farmers & Merchants Bank of Long Beach, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Erste Group Bank	0	4	1	1	2.50
Farmers & Merchants Bank of Long Beach	0	0	0	0	0.00

Dividends

Erste Group Bank pays an annual dividend of $1.01 per share and has a dividend yield of 2.9%. Farmers & Merchants Bank of Long Beach pays an annual dividend of $112.00 per share and has a dividend yield of 2.0%. Erste Group Bank pays out 25.8% of its earnings in the form of a dividend. Farmers & Merchants Bank of Long Beach pays out 31.3% 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. Erste Group Bank is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares Erste Group Bank and Farmers & Merchants Bank of Long Beach”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Erste Group Bank	$24.18 billion	1.20	$3.24 billion	$3.92	9.04
Farmers & Merchants Bank of Long Beach	$459.33 million	1.51	$44.88 million	$357.92	15.93

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

Volatility and Risk

Erste Group Bank has a beta of 1.24, indicating that its share price is 24% more volatile than the S&P 500. Comparatively, Farmers & Merchants Bank of Long Beach has a beta of 0.43, indicating that its share price is 57% less volatile than the S&P 500.

Insider & Institutional Ownership

0.4% of Erste Group Bank shares are owned by institutional investors. Comparatively, 7.6% of Farmers & Merchants Bank of Long Beach shares are owned by institutional investors. 12.8% of Farmers & Merchants Bank of Long Beach shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Erste Group Bank	15.21%	10.95%	0.93%
Farmers & Merchants Bank of Long Beach	9.77%	3.29%	0.37%

Summary

Erste Group Bank beats Farmers & Merchants Bank of Long Beach on 11 of the 16 factors compared between the two stocks.

About Erste Group Bank

Erste Group Bank AG provides a range of banking and other financial services to retail, corporate, and public sector customers. The company operates through Retail, Corporates, Group Markets, Asset/Liability Management & Local Corporate Center, Savings Banks, and Group Corporate Center segments. It provides mortgage and consumer loans, investment products, current accounts, savings products, and credit cards, as well as cross selling products, such as leasing, insurance, and building society products. The company also offers factoring and accounts receivable purchasing; investment, acquisition and leveraged, project, and commercial real estate finance; interest rate and currency hedging, letters of credit, documentary collections, and guarantees; account management, payments, digital-banking, cash logistics, and payment factory and cash pooling services; documentary collection, equity interests and investments, revolving export credits lines, letters of credit, customer financing, and export guarantee; and loan syndication, and debt and equity capital market services. In addition, it provides cash management, trade finance, customer referral, markets execution, debt capital markets, and custody and brokerage services. Further, the company offers corporate finance; portfolio management; trading and market; trade execution, market making, and short-term liquidity management; and asset/liability management services, as well as working capital and bridge loans. It operates in Austria, the Czech Republic, Slovakia, Romania, Hungary, Serbia, Croatia, and internationally. The company was founded in 1819 and is headquartered in Vienna, Austria.

About Farmers & Merchants Bank of Long Beach

Farmers & Merchants Bank of Long Beach provides various banking products and services to individuals, professionals, and small to medium-sized businesses in Los Angeles, Orange, and Santa Barbara Counties. It offers checking, savings, Christmas club savings, health savings, market rate savings, and money market accounts; demand and time deposits; certificates of deposit; and individual retirement account. The company also provides personal, home, commercial real estate, real estate and construction, and commercial business loans, as well as lines of credit; financing for residential loans comprising single-family and multifamily loans; and credit and debit cards. In addition, it offers account management, receivables and payables, and risk management services; commercial lending services; and faith-based and healthcare banking services, as well as online and mobile banking services. Farmers & Merchants Bank of Long Beach was founded in 1907 and is headquartered in Long Beach, California.