Contrasting Mercantile Bank (MBWM) and The Competition

Mercantile Bank (NASDAQ: MBWM) is one of 200 publicly-traded companies in the “Commercial Banks” industry, but how does it contrast to its competitors? We will compare Mercantile Bank to related businesses based on the strength of its risk, dividends, institutional ownership, analyst recommendations, earnings, valuation and profitability.

Dividends

Mercantile Bank pays an annual dividend of $0.76 per share and has a dividend yield of 2.2%. 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 1.9% and pay out 35.4% of their earnings in the form of a dividend.

Volatility & Risk

Mercantile Bank has a beta of 0.67, indicating that its stock price is 33% less volatile than the S&P 500. Comparatively, Mercantile Bank’s competitors have a beta of 0.75, indicating that their average stock price is 25% less volatile than the S&P 500.

Earnings & Valuation

This table compares Mercantile Bank and its competitors revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Mercantile Bank $139.49 million $31.91 million 18.21
Mercantile Bank Competitors $338.81 million $71.86 million 21.32

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

Insider and Institutional Ownership

54.2% of Mercantile Bank shares are owned by institutional investors. Comparatively, 47.0% of shares of all “Commercial Banks” companies are owned by institutional investors. 3.2% of Mercantile Bank shares are owned by company insiders. Comparatively, 11.7% of shares of all “Commercial Banks” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Mercantile Bank and its competitors’ 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 20.38% 8.68% 0.92%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Mercantile Bank and its competitors, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mercantile Bank 0 3 0 0 2.00
Mercantile Bank Competitors 372 2910 2347 68 2.37

Mercantile Bank presently has a consensus price target of $34.50, suggesting a potential downside of 0.83%. As a group, “Commercial Banks” companies have a potential upside of 5.13%. Given Mercantile Bank’s competitors stronger consensus rating and higher probable upside, analysts plainly believe Mercantile Bank has less favorable growth aspects than its competitors.

Summary

Mercantile Bank competitors 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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