MERCANTILE BANK CORP (MBWM) Stock Fundamental Analysis
NASDAQ:MBWM - Nasdaq - US5873761044 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to MBWM. MBWM was compared to 398 industry peers in the Banks industry. There are concerns on the financial health of MBWM while its profitability can be described as average. MBWM has a decent growth rate and is not valued too expensively. Finally MBWM also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
MBWM had positive earnings in the past year.
In the past year MBWM had a positive cash flow from operations.
MBWM had positive earnings in each of the past 5 years.
MBWM had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With an excellent Return On Assets value of 1.32%, MBWM belongs to the best of the industry, outperforming 85.68% of the companies in the same industry.
Looking at the Return On Equity, with a value of 13.62%, MBWM belongs to the top of the industry, outperforming 88.69% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.32% | ||
| ROE | 13.62% | ||
| ROIC | N/A |
ROA(3y)1.37%
ROA(5y)1.24%
ROE(3y)14.4%
ROE(5y)13.22%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
MBWM's Profit Margin of 34.38% is amongst the best of the industry. MBWM outperforms 91.46% of its industry peers.
MBWM's Profit Margin has been stable in the last couple of years.
MBWM does not have Operating Margin and Gross Margin available, so we won't be analyzing them here.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | N/A | ||
| PM (TTM) | 34.38% | ||
| GM | N/A |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3Y1.67%
PM growth 5Y1.03%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
MBWM does not have a ROIC to compare to the WACC, probably because it is not profitable.
Compared to 1 year ago, MBWM has about the same amount of shares outstanding.
Compared to 5 years ago, MBWM has less shares outstanding
Compared to 1 year ago, MBWM has an improved debt to assets ratio.
2.2 Solvency
MBWM has a debt to FCF ratio of 2.82. This is a good value and a sign of high solvency as MBWM would need 2.82 years to pay back of all of its debts.
The Debt to FCF ratio of MBWM (2.82) is comparable to the rest of the industry.
A Debt/Equity ratio of 0.45 indicates that MBWM is not too dependend on debt financing.
With a Debt to Equity ratio value of 0.45, MBWM is not doing good in the industry: 75.88% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.45 | ||
| Debt/FCF | 2.82 | ||
| Altman-Z | N/A |
ROIC/WACCN/A
WACC12.35%
2.3 Liquidity
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | N/A | ||
| Quick Ratio | N/A |
3. Growth
3.1 Past
The earnings per share for MBWM have decreased by -6.59% in the last year.
MBWM shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 11.29% yearly.
The Revenue has been growing slightly by 0.83% in the past year.
Measured over the past years, MBWM shows a quite strong growth in Revenue. The Revenue has been growing by 8.85% on average per year.
EPS 1Y (TTM)-6.59%
EPS 3Y9.21%
EPS 5Y11.29%
EPS Q2Q%-9.7%
Revenue 1Y (TTM)0.83%
Revenue growth 3Y8.68%
Revenue growth 5Y8.85%
Sales Q2Q%14.35%
3.2 Future
MBWM is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 0.97% yearly.
The Revenue is expected to grow by 3.89% on average over the next years.
EPS Next Y-0.46%
EPS Next 2Y0.97%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year4.08%
Revenue Next 2Y3.89%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 8.68 indicates a reasonable valuation of MBWM.
MBWM's Price/Earnings ratio is rather cheap when compared to the industry. MBWM is cheaper than 85.93% of the companies in the same industry.
MBWM is valuated cheaply when we compare the Price/Earnings ratio to 28.79, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 8.29, the valuation of MBWM can be described as very reasonable.
Based on the Price/Forward Earnings ratio, MBWM is valued a bit cheaper than 72.36% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of MBWM to the average of the S&P500 Index (21.38), we can say MBWM is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.68 | ||
| Fwd PE | 8.29 |
4.2 Price Multiples
Based on the Price/Free Cash Flow ratio, MBWM is valued cheaply inside the industry as 81.91% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.34 | ||
| EV/EBITDA | N/A |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)0.77
EPS Next 2Y0.97%
EPS Next 3YN/A
5. Dividend
5.1 Amount
MBWM has a Yearly Dividend Yield of 3.52%.
Compared to an average industry Dividend Yield of 3.54, MBWM pays a bit more dividend than its industry peers.
MBWM's Dividend Yield is a higher than the S&P500 average which is at 2.47.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.52% |
5.2 History
The dividend of MBWM is nicely growing with an annual growth rate of 6.02%!
MBWM has paid a dividend for at least 10 years, which is a reliable track record.
MBWM has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)6.02%
Div Incr Years12
Div Non Decr Years12
5.3 Sustainability
28.24% of the earnings are spent on dividend by MBWM. This is a low number and sustainable payout ratio.
MBWM's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP28.24%
EPS Next 2Y0.97%
EPS Next 3YN/A
41.84
-0.23 (-0.55%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupBanks
GICS IndustryBanks
Earnings (Last)
Earnings (Next)
Inst Owners65.61%
Inst Owner Change-45.87%
Ins Owners3.6%
Ins Owner Change0.09%
Market Cap679.48M
Analysts76.36
Price Target50.11 (19.77%)
Short Float %0.74%
Short Ratio1.78
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.52% |
Yearly Dividend1.39
Dividend Growth(5Y)6.02%
DP28.24%
Div Incr Years12
Div Non Decr Years12
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)3.19%
Min EPS beat(2)2.02%
Max EPS beat(2)4.35%
EPS beat(4)3
Avg EPS beat(4)5.14%
Min EPS beat(4)-0.69%
Max EPS beat(4)14.89%
EPS beat(8)6
Avg EPS beat(8)6.79%
EPS beat(12)8
Avg EPS beat(12)5.18%
EPS beat(16)12
Avg EPS beat(16)8.12%
Revenue beat(2)1
Avg Revenue beat(2)0%
Min Revenue beat(2)-0.02%
Max Revenue beat(2)0.01%
Revenue beat(4)1
Avg Revenue beat(4)-3.05%
Min Revenue beat(4)-11.36%
Max Revenue beat(4)0.01%
Revenue beat(8)3
Avg Revenue beat(8)-1.39%
Revenue beat(12)5
Avg Revenue beat(12)-1.18%
Revenue beat(16)8
Avg Revenue beat(16)0.14%
PT rev (1m)-7.31%
PT rev (3m)-7.31%
EPS NQ rev (1m)0%
EPS NQ rev (3m)11.92%
EPS NY rev (1m)0%
EPS NY rev (3m)9.15%
Revenue NQ rev (1m)-0.24%
Revenue NQ rev (3m)2.05%
Revenue NY rev (1m)0.77%
Revenue NY rev (3m)3.29%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.68 | ||
| Fwd PE | 8.29 | ||
| P/S | 2.94 | ||
| P/FCF | 7.34 | ||
| P/OCF | 6.72 | ||
| P/B | 1.16 | ||
| P/tB | 1.27 | ||
| EV/EBITDA | N/A |
EPS(TTM)4.82
EY11.52%
EPS(NY)5.05
Fwd EY12.06%
FCF(TTM)5.7
FCFY13.63%
OCF(TTM)6.23
OCFY14.88%
SpS14.25
BVpS35.99
TBVpS32.95
PEG (NY)N/A
PEG (5Y)0.77
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.32% | ||
| ROE | 13.62% | ||
| ROCE | N/A | ||
| ROIC | N/A | ||
| ROICexc | N/A | ||
| ROICexgc | N/A | ||
| OM | N/A | ||
| PM (TTM) | 34.38% | ||
| GM | N/A | ||
| FCFM | 40% |
ROA(3y)1.37%
ROA(5y)1.24%
ROE(3y)14.4%
ROE(5y)13.22%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3YN/A
OM growth 5YN/A
PM growth 3Y1.67%
PM growth 5Y1.03%
GM growth 3YN/A
GM growth 5YN/A
F-Score4
Asset Turnover0.04
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.45 | ||
| Debt/FCF | 2.82 | ||
| Debt/EBITDA | N/A | ||
| Cap/Depr | 81.2% | ||
| Cap/Sales | 3.69% | ||
| Interest Coverage | N/A | ||
| Cash Conversion | N/A | ||
| Profit Quality | 116.33% | ||
| Current Ratio | N/A | ||
| Quick Ratio | N/A | ||
| Altman-Z | N/A |
F-Score4
WACC12.35%
ROIC/WACCN/A
Cap/Depr(3y)54.21%
Cap/Depr(5y)59.85%
Cap/Sales(3y)2.74%
Cap/Sales(5y)3.34%
Profit Quality(3y)126.85%
Profit Quality(5y)109.22%
High Growth Momentum
Growth
EPS 1Y (TTM)-6.59%
EPS 3Y9.21%
EPS 5Y11.29%
EPS Q2Q%-9.7%
EPS Next Y-0.46%
EPS Next 2Y0.97%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)0.83%
Revenue growth 3Y8.68%
Revenue growth 5Y8.85%
Sales Q2Q%14.35%
Revenue Next Year4.08%
Revenue Next 2Y3.89%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1YN/A
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y54.5%
FCF growth 3Y16.21%
FCF growth 5Y24.22%
OCF growth 1Y51.8%
OCF growth 3Y16.11%
OCF growth 5Y17.68%