Critical Survey: Patriot National Bancorp (NASDAQ:PNBK) & F & M Bank (OTCMKTS:FMBM)

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

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for F & M Bank and Patriot National Bancorp, 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
Patriot National Bancorp	1	0	0	0	1.00

Dividends

F & M Bank pays an annual dividend of $1.04 per share and has a dividend yield of 3.8%. Patriot National Bancorp pays an annual dividend of $0.04 per share and has a dividend yield of 3.0%. F & M Bank pays out 34.7% of its earnings in the form of a dividend. Patriot National Bancorp pays out -1.5% 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.

Insider & Institutional Ownership

3.8% of F & M Bank shares are held by institutional investors. Comparatively, 39.3% of Patriot National Bancorp shares are held by institutional investors. 11.6% of F & M Bank shares are held by insiders. Comparatively, 11.0% of Patriot National Bancorp shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
F & M Bank	13.58%	11.35%	0.80%
Patriot National Bancorp	-35.17%	-37.63%	-2.08%

Valuation & Earnings

This table compares F & M Bank and Patriot National Bancorp”s top-line 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	1.29	$7.28 million	$3.00	9.10
Patriot National Bancorp	$26.53 million	5.76	-$39.88 million	($2.70)	-0.49

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

Volatility & Risk

F & M Bank has a beta of 0.26, indicating that its share price is 74% less volatile than the S&P 500. Comparatively, Patriot National Bancorp has a beta of -0.63, indicating that its share price is 163% less volatile than the S&P 500.

Summary

F & M Bank beats Patriot National Bancorp on 10 of the 14 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 Patriot National Bancorp

Patriot National Bancorp, Inc. operates as the holding company for Patriot Bank, N.A. that provides community banking services to individuals, small and medium-sized businesses, and professionals. The company accepts consumer and commercial deposit accounts, such as checking, interest-bearing negotiable order of withdrawal, money market, time certificates of deposit, savings, prepaid deposit, on-line national money market, individual retirement accounts, and health savings accounts, as well as certificate of deposit account registry service. Its loan portfolio comprises commercial real estate, commercial business, small business administration, construction, purchased residential real estate, and various consumer loans. The company also offers automated clearing house transfers, lockbox, internet banking, bill payment, remote deposit capture, debit card, money order, traveler's check, and automatic teller machine services. Patriot National Bancorp, Inc. was founded in 1994 and is headquartered in Stamford, Connecticut.