Analyzing HBT Financial (NASDAQ:HBT) and F & M Bank (OTCMKTS:FMBM)

F & M Bank (OTCMKTS:FMBM) and HBT Financial (NASDAQ:HBT) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, analyst recommendations, valuation, institutional ownership, dividends and profitability.

Dividends

F & M Bank pays an annual dividend of $1.04 per share and has a dividend yield of 3.1%. HBT Financial pays an annual dividend of $0.92 per share and has a dividend yield of 3.3%. F & M Bank pays out 30.8% of its earnings in the form of a dividend. HBT Financial pays out 42.2% 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. HBT Financial has raised its dividend for 5 consecutive years. HBT Financial 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 for F & M Bank and HBT Financial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
F & M Bank	0	0	0	0	0.00
HBT Financial	0	2	2	2	3.00

HBT Financial has a consensus price target of $30.75, suggesting a potential upside of 9.39%. Given HBT Financial’s stronger consensus rating and higher possible upside, analysts plainly believe HBT Financial is more favorable than F & M Bank.

Insider and Institutional Ownership

3.9% of F & M Bank shares are held by institutional investors. Comparatively, 78.6% of HBT Financial shares are held by institutional investors. 10.7% of F & M Bank shares are held by company insiders. Comparatively, 51.9% of HBT Financial shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Risk and Volatility

F & M Bank has a beta of 0.3, suggesting that its stock price is 70% less volatile than the S&P 500. Comparatively, HBT Financial has a beta of 0.53, suggesting that its stock price is 47% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
F & M Bank	14.96%	11.96%	0.89%
HBT Financial	22.72%	13.87%	1.65%

Earnings & Valuation

This table compares F & M Bank and HBT Financial”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
F & M Bank	$78.92 million	1.50	$11.23 million	$3.38	9.79
HBT Financial	$293.97 million	3.48	$77.01 million	$2.18	12.89

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

Summary

HBT Financial beats F & M Bank on 16 of the 18 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 HBT Financial

HBT Financial, Inc. operates as the bank holding company for Heartland Bank and Trust Company that provides business, commercial, and retail banking products and services to individuals, businesses, and municipal entities in Central and Northeastern Illinois, and Eastern Iowa. The company's deposits accounts consist of noninterest-bearing demand deposits, interest-bearing transaction accounts, money market accounts, savings accounts, certificates of deposits, health savings accounts, and individual retirement accounts. Its loan offering comprises owner and non-owner occupied commercial real estate; construction and land development and multi-family; commercial and industrial; agricultural and farmland; and one-to-four family residential loans, as well as municipal, consumer, and other loans. The company also offers wealth management services, including financial planning to consumers, trusts, and estates; trustee and custodial; investment management; corporate retirement plan consulting and administration; and retail brokerage services. In addition, it provides farmland management, and farmland sales and services; commercial checking accounts; and treasury management services, as well as originates and sells residential mortgage loans. Further, the company offers digital banking services, such as online and mobile banking, and digital payment services, as well as personal financial management tools. The company was formerly known as Heartland Bancorp, Inc. and changed its name to HBT Financial, Inc. in September 2019. HBT Financial, Inc. was founded in 1920 and is headquartered in Bloomington, Illinois.