Farmers & Merchants Bank of Long Beach (OTCMKTS:FMBL) versus Suruga Bank (OTCMKTS:SUGBY) Head-To-Head Contrast

Farmers & Merchants Bank of Long Beach (OTCMKTS:FMBL) and Suruga Bank (OTCMKTS:SUGBY) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, risk, analyst recommendations and valuation.

Earnings and Valuation

This table compares Farmers & Merchants Bank of Long Beach and Suruga Bank’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Farmers & Merchants Bank of Long Beach	$431.97 million	1.42	$70.01 million	$485.58	10.53
Suruga Bank	$633.45 million	2.04	$106.09 million	$5.24	12.51

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

Analyst Recommendations

This is a summary of current ratings and target prices for Farmers & Merchants Bank of Long Beach and Suruga Bank, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Farmers & Merchants Bank of Long Beach	0	0	0	0	N/A
Suruga Bank	0	0	0	0	N/A

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Farmers & Merchants Bank of Long Beach	12.34%	4.21%	0.46%
Suruga Bank	16.87%	5.70%	0.46%

Institutional and Insider Ownership

7.6% of Farmers & Merchants Bank of Long Beach shares are held by institutional investors. 12.8% of Farmers & Merchants Bank of Long Beach shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility and Risk

Farmers & Merchants Bank of Long Beach has a beta of 0.42, meaning that its stock price is 58% less volatile than the S&P 500. Comparatively, Suruga Bank has a beta of -0.06, meaning that its stock price is 106% less volatile than the S&P 500.

Dividends

Farmers & Merchants Bank of Long Beach pays an annual dividend of $112.00 per share and has a dividend yield of 2.2%. Suruga Bank pays an annual dividend of $1.33 per share and has a dividend yield of 2.0%. Farmers & Merchants Bank of Long Beach pays out 23.1% of its earnings in the form of a dividend. Suruga Bank pays out 25.4% 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. Farmers & Merchants Bank of Long Beach is clearly the better dividend stock, given its higher yield and lower payout ratio.

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.

About Suruga Bank

Suruga Bank Ltd. provides various banking and financial products and services to individuals and corporate customers in Japan. The company offers deposit products, such as time, ordinary, savings, foreign currency, and other deposits, as well as current and general accounts; card, housing, second house, startup, and business up term loans, as well as loans by purpose; credit and debit cards; overdrafts; and other financing products. It also provides investment trust, public bond, pension contribution, insurance, inheritance/trust, lottery, foreign currency, pay-easy, web direct, safe deposit box, external linkage, foreign remittance, fund management, e-combination, payment, nursing care/medical care/dispensing compensation receivable factoring, mortgage, and Internet and telephone banking services. In addition, the company offers staffing, money lending, guarantee, printing, leasing, and agency services. The company was incorporated in 1895 and is headquartered in Numazu, Japan.