Mitsubishi UFJ Financial Group (MTU) vs. Farmers & Merchants Bancorp (FMAO) Financial Review

Farmers & Merchants Bancorp (NASDAQ: FMAO) and Mitsubishi UFJ Financial Group (NYSE:MTU) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, dividends, valuation, institutional ownership, profitability and analyst recommendations.

Insider and Institutional Ownership

4.2% of Farmers & Merchants Bancorp shares are held by institutional investors. Comparatively, 1.1% of Mitsubishi UFJ Financial Group shares are held by institutional investors. 5.0% of Farmers & Merchants Bancorp shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and target prices for Farmers & Merchants Bancorp and Mitsubishi UFJ Financial Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Farmers & Merchants Bancorp 0 1 0 0 2.00
Mitsubishi UFJ Financial Group 0 1 3 0 2.75

Earnings and Valuation

This table compares Farmers & Merchants Bancorp and Mitsubishi UFJ Financial Group’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Farmers & Merchants Bancorp $45.14 million 8.04 $12.36 million $1.35 29.35
Mitsubishi UFJ Financial Group $29.91 billion 3.00 $9.30 billion $0.70 9.66

Mitsubishi UFJ Financial Group has higher revenue and earnings than Farmers & Merchants Bancorp. Mitsubishi UFJ Financial Group 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.

Dividends

Farmers & Merchants Bancorp pays an annual dividend of $0.52 per share and has a dividend yield of 1.3%. Mitsubishi UFJ Financial Group pays an annual dividend of $0.08 per share and has a dividend yield of 1.2%. Farmers & Merchants Bancorp pays out 38.5% of its earnings in the form of a dividend. Mitsubishi UFJ Financial Group pays out 11.4% 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.

Volatility and Risk

Farmers & Merchants Bancorp has a beta of 0.06, meaning that its stock price is 94% less volatile than the S&P 500. Comparatively, Mitsubishi UFJ Financial Group has a beta of 1.63, meaning that its stock price is 63% more volatile than the S&P 500.

Profitability

This table compares Farmers & Merchants Bancorp and Mitsubishi UFJ Financial Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Farmers & Merchants Bancorp 24.46% 9.74% 1.17%
Mitsubishi UFJ Financial Group 16.99% 6.59% 0.35%

Summary

Farmers & Merchants Bancorp beats Mitsubishi UFJ Financial Group on 9 of the 15 factors compared between the two stocks.

About Farmers & Merchants Bancorp

Farmers & Merchants Bancorp, Inc. is a bank holding company. The Company’s primary subsidiary, The Farmers & Merchants State Bank (the Bank), is a community bank operating in Northwest Ohio and Northeast Indiana. The Company’s other subsidiary, Farmers & Merchants Risk Management (Captive), is a captive insurance company. The Bank is engaged in general commercial banking business. The Bank’s activities include commercial, agricultural and residential mortgage as well as consumer and credit card lending activities. The Bank’s loan portfolio consists of loans made to customers in the farming industry for such things as farm land, farm equipment, livestock and operating loans for seed, fertilizer and feed. Its other types of lending activities include loans for home improvements and loans for such items as autos, trucks, recreational vehicles and motorcycles. The Bank also provides checking account services, as well as savings and time deposit services, such as certificates of deposits.

About Mitsubishi UFJ Financial Group

Mitsubishi UFJ Financial Group, Inc. (MUFJ) is a bank holding company. The Company’s segments include Integrated Retail Banking Business Group, Integrated Corporate Banking Business Group, Integrated Trust Assets Business Group, Integrated Global Business Group and Krungsri. The Company’s services include commercial banking, trust banking, securities, credit cards, consumer finance, asset management, leasing and various fields of financial services. The Company’s subsidiaries include The Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU), Mitsubishi UFJ Trust and Banking Corporation (MUTB), Mitsubishi UFJ Securities Holdings Co., Ltd. (MUSHD), Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. (MUMSS) and Mitsubishi UFJ NICOS Co., Ltd. Its Retail Banking Business Group covers retail businesses, including commercial banking, trust banking and securities businesses, and offers a range of banking products and services, including financial consulting services, to retail customers in Japan.

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