Critical Review: Bay Commercial Bank (NASDAQ:BCML) vs. Freddie Mac (OTCMKTS:FMCC)
by Danessa Lincoln · The Markets DailyFreddie Mac (OTCMKTS:FMCC – Get Free Report) and Bay Commercial Bank (NASDAQ:BCML – Get Free Report) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, profitability, valuation, institutional ownership, dividends, risk and analyst recommendations.
Profitability
This table compares Freddie Mac and Bay Commercial Bank’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Freddie Mac | 9.58% | -90.29% | 0.37% |
| Bay Commercial Bank | 9.20% | 6.98% | 0.90% |
Earnings & Valuation
This table compares Freddie Mac and Bay Commercial Bank”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Freddie Mac | $129.82 billion | 0.02 | $10.73 billion | $0.01 | 315.00 |
| Bay Commercial Bank | $141.48 million | 2.37 | $23.93 million | $1.20 | 25.58 |
Freddie Mac has higher revenue and earnings than Bay Commercial Bank. Bay Commercial Bank is trading at a lower price-to-earnings ratio than Freddie Mac, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
66.2% of Bay Commercial Bank shares are owned by institutional investors. 0.1% of Freddie Mac shares are owned by insiders. Comparatively, 2.9% of Bay Commercial Bank shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Risk and Volatility
Freddie Mac has a beta of 1.74, suggesting that its share price is 74% more volatile than the S&P 500. Comparatively, Bay Commercial Bank has a beta of 0.32, suggesting that its share price is 68% less volatile than the S&P 500.
Analyst Ratings
This is a breakdown of current ratings and recommmendations for Freddie Mac and Bay Commercial Bank, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Freddie Mac | 1 | 3 | 1 | 0 | 2.00 |
| Bay Commercial Bank | 0 | 4 | 0 | 1 | 2.40 |
Freddie Mac presently has a consensus price target of $9.88, suggesting a potential upside of 213.49%. Bay Commercial Bank has a consensus price target of $34.00, suggesting a potential upside of 10.75%. Given Freddie Mac’s higher probable upside, analysts plainly believe Freddie Mac is more favorable than Bay Commercial Bank.
Summary
Bay Commercial Bank beats Freddie Mac on 8 of the 15 factors compared between the two stocks.
About Freddie Mac
Federal Home Loan Mortgage Corporation operates in the secondary mortgage market in the United States. It operates through two segments, Single-Family and Multifamily. The Single-Family segment purchases, securitizes, and guarantees single-family loans; and manages single-family mortgage credit and market risk, as well as manages mortgage-related investments portfolio, single-family securitization activities, and treasury functions. This segment serves mortgage banking companies, commercial banks, regional banks, community banks, credit unions, housing finance agencies, savings institutions, and non-depository financial institutions. The Multifamily segment engages in the purchase, securitization, and guarantee of multifamily loans; issuance of multifamily K certificates; manages multifamily mortgage credit and market risk; and invests in multifamily loans and mortgage-related securities. It serves banks and other financial institutions, insurance companies, money managers, hedge funds, pension funds, state and local governments, and broker dealers. Federal Home Loan Mortgage Corporation incorporated in 1970 and is headquartered in McLean, Virginia.
About Bay Commercial Bank
BayCom Corp operates as the bank holding company for United Business Bank that provides various financial services to small and mid-sized businesses, service professionals, and individuals. The company provides demand, savings, money market, and time deposit accounts. It offers commercial and multifamily real estate loans, including owner-occupied and investor real estate loans; commercial and industrial loans, such as equipment loans and working capital lines of credit; small business administration loans; construction and land loans; agriculture-related loans; and consumer loans comprising installment loans, unsecured and secured personal lines of credit, and overdraft protection. In addition, the company provides online and mobile banking, automated teller machine, remote deposit capture, night depository, courier, direct deposit, treasury management, wire transfer, automated clearing house, debit cards, cashier's and travelers checks, letters of credit, lockbox, positive pay, reverse positive pay, and account reconciliation services, as well as zero balance accounts and sweep accounts, including loan sweep. It operates through a network of full-service banking branches in Northern and Southern California; Las Vegas, Nevada; Denver, Colorado; Custer, Delta, and Grand counties, Colorado; and Seattle, Washington and Central New Mexico. The company was formerly known as Bay Commercial Bank and changed its name to BayCom Corp in January 2017. BayCom Corp was incorporated in 2004 and is headquartered in Walnut Creek, California.