Magyar Bancorp (NASDAQ:MGYR) & F & M Bank (OTCMKTS:FMBM) Head-To-Head Contrast

F & M Bank (OTCMKTS:FMBM) and Magyar Bancorp (NASDAQ:MGYR) are both small-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their earnings, risk, valuation, profitability, institutional ownership, dividends and analyst recommendations.

Risk & Volatility

F & M Bank has a beta of 0.3, meaning that its stock price is 70% less volatile than the S&P 500. Comparatively, Magyar Bancorp has a beta of 0.25, meaning that its stock price is 75% less volatile than the S&P 500.

Valuation & Earnings

This table compares F & M Bank and Magyar Bancorp”s 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	1.28	$7.28 million	$3.00	9.05
Magyar Bancorp	$58.42 million	1.86	$9.76 million	$1.56	10.78

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

Dividends

F & M Bank pays an annual dividend of $1.04 per share and has a dividend yield of 3.8%. Magyar Bancorp pays an annual dividend of $0.32 per share and has a dividend yield of 1.9%. F & M Bank pays out 34.7% of its earnings in the form of a dividend. Magyar Bancorp pays out 20.5% 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. Magyar Bancorp has raised its dividend for 3 consecutive years.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
F & M Bank	13.58%	11.69%	0.81%
Magyar Bancorp	15.00%	8.56%	0.97%

Institutional and Insider Ownership

3.8% of F & M Bank shares are owned by institutional investors. Comparatively, 46.3% of Magyar Bancorp shares are owned by institutional investors. 11.6% of F & M Bank shares are owned by company insiders. Comparatively, 7.4% of Magyar Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and recommmendations for F & M Bank and Magyar Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
F & M Bank	0	0	0	0	0.00
Magyar Bancorp	0	1	0	0	2.00

Summary

Magyar Bancorp beats F & M Bank on 9 of the 15 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 Magyar Bancorp

Magyar Bancorp, Inc. operates as the holding company for Magyar Bank that provides various consumer and commercial banking services to individuals, businesses, and nonprofit organizations in New Jersey, the United States. It accepts various deposit accounts, including demand, savings, NOW, money market, and retirement accounts, as well as certificates of deposit. The company also provides residential mortgage loans, multi-family and commercial real estate mortgage loans, home equity loans and lines of credit, commercial business loans, and construction loans, as well as small business administration loans. In addition, it offers non-deposit investment products and financial planning services, including insurance products, fixed and variable annuities, and retirement planning for individual and commercial customers; and buys, sells, and holds investment securities. The company has branch offices located in New Brunswick, North Brunswick, South Brunswick, Branchburg, Bridgewater, and Edison, New Jersey. Magyar Bancorp, Inc. was founded in 1922 and is headquartered in New Brunswick, New Jersey.