Head to Head Analysis: Mercantile Bank (MBWM) vs. Its Peers

Mercantile Bank (NASDAQ: MBWM) is one of 201 publicly-traded companies in the “Commercial Banks” industry, but how does it contrast to its rivals? We will compare Mercantile Bank to related businesses based on the strength of its risk, institutional ownership, dividends, valuation, analyst recommendations, earnings and profitability.

Insider and Institutional Ownership

54.1% of Mercantile Bank shares are owned by institutional investors. Comparatively, 46.9% of shares of all “Commercial Banks” companies are owned by institutional investors. 3.2% of Mercantile Bank shares are owned by insiders. Comparatively, 11.7% of shares of all “Commercial Banks” companies are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Mercantile Bank and its rivals, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mercantile Bank 0 4 0 0 2.00
Mercantile Bank Competitors 433 3082 2467 86 2.36

Mercantile Bank presently has a consensus price target of $36.00, indicating a potential downside of 3.87%. As a group, “Commercial Banks” companies have a potential upside of 2.82%. Given Mercantile Bank’s rivals stronger consensus rating and higher probable upside, analysts plainly believe Mercantile Bank has less favorable growth aspects than its rivals.

Risk and Volatility

Mercantile Bank has a beta of 0.68, indicating that its share price is 32% less volatile than the S&P 500. Comparatively, Mercantile Bank’s rivals have a beta of 0.73, indicating that their average share price is 27% less volatile than the S&P 500.

Profitability

This table compares Mercantile Bank and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Mercantile Bank 22.18% 8.91% 1.00%
Mercantile Bank Competitors 20.65% 8.72% 0.93%

Dividends

Mercantile Bank pays an annual dividend of $0.76 per share and has a dividend yield of 2.0%. Mercantile Bank pays out 39.8% of its earnings in the form of a dividend. As a group, “Commercial Banks” companies pay a dividend yield of 1.8% and pay out 35.2% of their earnings in the form of a dividend.

Valuation & Earnings

This table compares Mercantile Bank and its rivals revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Mercantile Bank $139.49 million $31.91 million 19.61
Mercantile Bank Competitors $338.81 million $71.86 million 20.16

Mercantile Bank’s rivals have higher revenue and earnings than Mercantile Bank. Mercantile Bank is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Summary

Mercantile Bank rivals beat Mercantile Bank on 10 of the 15 factors compared.

About Mercantile Bank

Mercantile Bank Corporation is a bank holding company. The Company owns the Mercantile Bank of Michigan (the Bank). The Bank is a state banking company. The Bank provides commercial banking services primarily to small- to medium-sized businesses and retail banking services. The Bank makes secured and unsecured commercial, construction, mortgage and consumer loans, and accepts checking, savings and time deposits. The Bank also enables customers to conduct certain loan and deposit transactions by personal computer and through mobile applications. Courier service is provided to certain commercial customers, and safe deposit facilities are available at its office locations. The Bank’s commercial lending group originates commercial loans and leases primarily in its market areas. The Bank’s primary deposit products are checking, savings and term certificate accounts.

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