Farmers and Merchants Bancshares (OTCMKTS:FMFG) and HomeStreet (NASDAQ:HMST) Critical Survey

HomeStreet (NASDAQ:HMST) and Farmers and Merchants Bancshares (OTCMKTS:FMFG) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, valuation, earnings, analyst recommendations, dividends, institutional ownership and risk.

Profitability

This table compares HomeStreet and Farmers and Merchants Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
HomeStreet	-8.97%	-0.43%	-0.02%
Farmers and Merchants Bancshares	N/A	N/A	N/A

Analyst Ratings

This is a summary of recent ratings for HomeStreet and Farmers and Merchants Bancshares, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HomeStreet	0	3	0	0	2.00
Farmers and Merchants Bancshares	0	0	0	0	N/A

HomeStreet presently has a consensus price target of $12.17, suggesting a potential upside of 10.81%. Given HomeStreet’s higher possible upside, equities analysts clearly believe HomeStreet is more favorable than Farmers and Merchants Bancshares.

Institutional & Insider Ownership

74.7% of HomeStreet shares are owned by institutional investors. Comparatively, 0.2% of Farmers and Merchants Bancshares shares are owned by institutional investors. 4.6% of HomeStreet shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares HomeStreet and Farmers and Merchants Bancshares’ top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HomeStreet	$441.66 million	0.47	-$27.51 million	($2.13)	-5.15
Farmers and Merchants Bancshares	N/A	N/A	N/A	$1.13	14.16

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

Summary

Farmers and Merchants Bancshares beats HomeStreet on 5 of the 9 factors compared between the two stocks.

About HomeStreet

HomeStreet, Inc. operates as the bank holding company for HomeStreet Bank that provides commercial, mortgage, and consumer/retail banking services in the Western United States. The company offers personal and business checking, savings, interest-bearing negotiable order of withdrawal, and money market accounts, as well as certificates of deposit; credit cards; insurance; and treasury management services. Its loan products include commercial real estate (CRE), multifamily, construction and land development, owner occupied CRE and commercial business loans; and single family, home equity, and other loans. In addition, the company offers online, mobile, and telephone banking. It serves small and medium sized businesses, real estate investors, professional firms, and individuals. The company operates through branches and ATMs. The company was formerly known as Continental Mortgage and Loan Company. HomeStreet, Inc. was incorporated in 1921 and is headquartered in Seattle, Washington.

About Farmers and Merchants Bancshares

Farmers and Merchants Bancshares, Inc. operates as the bank holding company for Farmers and Merchants Bank that provides commercial and retail banking services to individuals and businesses in Baltimore and Carroll counties in Maryland and surrounding areas of northern Maryland. It offers checking, savings, money market, individual retirement, and sweep accounts, as well as certificates of deposit, remote check deposits, and repurchase agreements. The company also provides credit for residential mortgages, including federal housing administration and veterans affairs loans; construction loans; home equity lines; personal installment loans; and other consumer financing, as well as finances commerce and industry by providing credit and deposit services for small to medium size businesses and the agricultural community. In addition, it offers commercial lending, which includes commercial mortgages, land acquisition and development loans, lines of credit, accounts receivable financing, and term loans for fixed asset purchases, as well as loans guaranteed by the Small Business Administration and the United States Department of Agriculture. Further, the company provides automated teller machine, internet, mobile banking, and automated telephone services, as well as debit and credit cards. It serves customers through its office located in Upperco, Maryland; branches located in Hampstead, Greenmount, Reisterstown, Owings Mills, Eldersburg, and Westminster, Maryland; and a satellite branch located in Westminster, Maryland. Farmers and Merchants Bancshares, Inc. was founded in 1919 and is headquartered in Hampstead, Maryland.