Head to Head Survey: Colony Bankcorp (NYSE:CBAN) versus Farmers & Merchants Bancorp (NASDAQ:FMAO)

Colony Bankcorp (NYSE:CBAN) and Farmers & Merchants Bancorp (NASDAQ:FMAO) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, institutional ownership, profitability, risk, valuation and earnings.

Dividends

Colony Bankcorp pays an annual dividend of $0.48 per share and has a dividend yield of 2.3%. Farmers & Merchants Bancorp pays an annual dividend of $0.96 per share and has a dividend yield of 2.6%. Colony Bankcorp pays out 26.4% of its earnings in the form of a dividend. Farmers & Merchants Bancorp pays out 30.9% 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. Colony Bankcorp has raised its dividend for 7 consecutive years and Farmers & Merchants Bancorp has raised its dividend for 19 consecutive years. Farmers & Merchants Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Colony Bankcorp and Farmers & Merchants Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Colony Bankcorp	0	1	3	0	2.75
Farmers & Merchants Bancorp	0	3	0	1	2.50

Colony Bankcorp presently has a consensus price target of $23.00, indicating a potential upside of 12.40%. Farmers & Merchants Bancorp has a consensus price target of $33.75, indicating a potential downside of 8.04%. Given Colony Bankcorp’s stronger consensus rating and higher probable upside, equities analysts plainly believe Colony Bankcorp is more favorable than Farmers & Merchants Bancorp.

Institutional & Insider Ownership

50.4% of Colony Bankcorp shares are held by institutional investors. Comparatively, 24.0% of Farmers & Merchants Bancorp shares are held by institutional investors. 3.9% of Colony Bankcorp shares are held by company insiders. Comparatively, 7.3% of Farmers & Merchants Bancorp shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk & Volatility

Colony Bankcorp has a beta of 0.57, meaning that its share price is 43% less volatile than the S&P 500. Comparatively, Farmers & Merchants Bancorp has a beta of 0.76, meaning that its share price is 24% less volatile than the S&P 500.

Valuation & Earnings

This table compares Colony Bankcorp and Farmers & Merchants Bancorp”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Colony Bankcorp	$190.23 million	2.94	$28.25 million	$1.82	11.24
Farmers & Merchants Bancorp	$190.68 million	2.65	$33.31 million	$3.11	11.80

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

Profitability

This table compares Colony Bankcorp and Farmers & Merchants Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Colony Bankcorp	16.71%	10.66%	1.11%
Farmers & Merchants Bancorp	21.30%	11.25%	1.22%

Summary

Farmers & Merchants Bancorp beats Colony Bankcorp on 12 of the 18 factors compared between the two stocks.

About Colony Bankcorp

Colony Bankcorp, Inc. is the bank holding company for Colony Bank, a community bank serving individuals, businesses and organizations primarily in Georgia. Founded in 1975, the bank is headquartered in Fitzgerald, Georgia. Colony Bank offers personal and business deposit accounts, loans and other lending services, along with online and mobile banking. Its business banking services include commercial lending and cash management, while additional offerings include mortgage banking and wealth management services.

About Farmers & Merchants Bancorp

Farmers & Merchants Bancorp, Inc. is a bank holding company whose primary subsidiary, The Farmers & Merchants State Bank, provides banking services to individuals, businesses and agricultural customers. Its offerings include deposit accounts, commercial and consumer lending, mortgages and other financial services. Founded in 1897, the company is headquartered in Archbold, Ohio, and serves communities in northwest Ohio and northeast Indiana through its banking locations and digital channels.