Contrasting Mercantile Bank (MBWM) and The Competition

Mercantile Bank (NASDAQ:MBWM) is one of 919 public companies in the “Banks” industry, but how does it contrast to its rivals? We will compare Mercantile Bank to related businesses based on the strength of its dividends, valuation, profitability, earnings, institutional ownership, analyst recommendations and risk.

Analyst Ratings

This is a summary of recent recommendations for Mercantile Bank and its rivals, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mercantile Bank	0	3	3	0	2.50
Mercantile Bank Competitors	7464	30193	27759	1465	2.35

Mercantile Bank presently has a consensus price target of $62.20, indicating a potential upside of 0.47%. As a group, “Banks” companies have a potential upside of 13.94%. Given Mercantile Bank’s rivals higher probable upside, analysts plainly believe Mercantile Bank has less favorable growth aspects than its rivals.

Dividends

Mercantile Bank pays an annual dividend of $1.60 per share and has a dividend yield of 2.6%. Mercantile Bank pays out 28.5% of its earnings in the form of a dividend. As a group, “Banks” companies pay a dividend yield of 9.2% and pay out 28.9% of their earnings in the form of a dividend. Mercantile Bank has raised its dividend for 14 consecutive years.

Insider and Institutional Ownership

58.6% of Mercantile Bank shares are held by institutional investors. Comparatively, 47.8% of shares of all “Banks” companies are held by institutional investors. 2.5% of Mercantile Bank shares are held by company insiders. Comparatively, 9.8% of shares of all “Banks” companies are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings & Valuation

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

	Gross Revenue	Net Income	Price/Earnings Ratio
Mercantile Bank	$371.80 million	$88.75 million	11.04
Mercantile Bank Competitors	$9.95 billion	$2.42 billion	17.42

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.

Volatility and Risk

Mercantile Bank has a beta of 0.82, indicating that its share price is 18% less volatile than the S&P 500. Comparatively, Mercantile Bank’s rivals have a beta of 0.52, indicating that their average share price is 48% 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	24.42%	13.37%	1.43%
Mercantile Bank Competitors	15.66%	9.44%	0.93%

Summary

Mercantile Bank beats its rivals on 8 of the 15 factors compared.

About Mercantile Bank

Mercantile Bank Corporation operates as the bank holding company for Mercantile Bank of Michigan that provides commercial and retail banking services to small- to medium-sized businesses and individuals in the United States. It accepts various deposit products, including checking, savings, and term certificate accounts; time deposits; and certificates of deposit. The company also provides commercial and industrial loans; vacant land, land development, and residential construction loans; owner and non-owner occupied real estate loans; multi-family and residential rental property loans; single-family residential real estate loans; home equity line of credit programs; and consumer loans, such as new and used automobile and boat loans, and credit cards, as well as overdraft protection services; and residential mortgage and instalment loans. In addition, it offers courier services and safe deposit facilities; and insurance products, such as private passenger automobile, homeowners, personal inland marine, boat owners, recreational vehicle, dwelling fire, umbrella policies, small business, and life insurance products. The company was incorporated in 1997 and is headquartered in Grand Rapids, Michigan.