Head-To-Head Contrast: F & M Bank (OTCMKTS:FMBM) versus Wintrust Financial (NASDAQ:WTFC)

F & M Bank (OTCMKTS:FMBM) and Wintrust Financial (NASDAQ:WTFC) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, profitability, earnings, institutional ownership, risk, dividends and valuation.

Dividends

F & M Bank pays an annual dividend of $1.04 per share and has a dividend yield of 5.5%. Wintrust Financial pays an annual dividend of $2.00 per share and has a dividend yield of 1.8%. F & M Bank pays out 50.0% of its earnings in the form of a dividend. Wintrust Financial pays out 19.4% 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. Wintrust Financial has raised its dividend for 12 consecutive years.

Analyst Ratings

This is a summary of current ratings for F & M Bank and Wintrust Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
F & M Bank	0	0	0	0	0.00
Wintrust Financial	0	2	9	2	3.00

Wintrust Financial has a consensus price target of $133.69, indicating a potential upside of 19.24%. Given Wintrust Financial’s stronger consensus rating and higher possible upside, analysts plainly believe Wintrust Financial is more favorable than F & M Bank.

Profitability

This table compares F & M Bank and Wintrust Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
F & M Bank	9.68%	8.77%	0.55%
Wintrust Financial	17.52%	12.60%	1.13%

Valuation & Earnings

This table compares F & M Bank and Wintrust Financial”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
F & M Bank	$75.25 million	0.89	$7.28 million	$2.08	9.13
Wintrust Financial	$2.45 billion	3.05	$695.04 million	$10.31	10.87

Wintrust Financial has higher revenue and earnings than F & M Bank. F & M Bank is trading at a lower price-to-earnings ratio than Wintrust Financial, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

3.8% of F & M Bank shares are held by institutional investors. Comparatively, 93.5% of Wintrust Financial shares are held by institutional investors. 10.7% of F & M Bank shares are held by insiders. Comparatively, 1.5% of Wintrust Financial shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Volatility and Risk

F & M Bank has a beta of 0.35, meaning that its share price is 65% less volatile than the S&P 500. Comparatively, Wintrust Financial has a beta of 1.16, meaning that its share price is 16% more volatile than the S&P 500.

Summary

Wintrust Financial beats F & M Bank on 16 of the 18 factors compared between the two stocks.

About F & M Bank

F & M Bank Corp. operates as the bank holding company for Farmers & Merchants Bank that provides financial products and services to consumers and businesses in Virginia. The company offers commercial and individual demand and time deposit accounts, savings accounts, money market accounts, internet and mobile banking services, and drive-in banking services. It also provides construction loans, including residential, and land acquisition and development loans; commercial real estate loans; business loans; consumer loans, such as personal loans, automobile loans, deposit account loans, installment and demand loans, and home equity loans; residential mortgage loans; credit cards; dealer finance; farmland loans; multi-family loans; and commercial and industrial loans. In addition, the company offers brokerage services and commercial and personal insurance products. Further, it originates conventional and government agency sponsored mortgages; and offers title insurance and real estate settlement services. The company was founded in 1908 and is headquartered in Timberville, Virginia.

About Wintrust Financial

Wintrust Financial Corporation operates as a financial holding company. It operates in three segments: Community Banking, Specialty Finance, and Wealth Management. The Community Banking segment offers non-interest bearing deposits, non-brokered interest-bearing transaction accounts, and savings and domestic time deposits; home equity, consumer, and real estate loans; safe deposit facilities; and automatic teller machine (ATM), online and mobile banking, and other services. It also engages in the retail origination and purchase of residential mortgages; and provision of lending, deposits, and treasury management services to condominium, homeowner, and community associations, as well as asset-based lending for middle-market companies. In addition, this segment offers loan and deposit services to mortgage brokerage companies; lending to restaurant franchisees; direct leasing; small business administration loans; commercial mortgages and construction loans; and financial solutions. It provides personal and commercial banking services primarily to individuals, small to mid-sized businesses, local governmental units, and institutional clients. The Specialty Finance segment offers commercial and life insurance premiums financing for businesses and individuals; accounts receivable financing, value-added, and out-sourced administrative services; other specialty finance services; equipment financing through structured loan and lease products; and property and casualty premium financing; as well as data processing of payrolls, billing, and cash management services to temporary staffing industry. The Wealth Management segment provides wealth management services, such as trust and investment, asset management, tax-deferred exchange, securities brokerage, and retirement plan services. Wintrust Financial Corporation was founded in 1991 and is headquartered in Rosemont, Illinois.