Mercantile Bank (NASDAQ: MBWM – Get Rating) and First National (NASDAQ: FXNC – Get Rating) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, risk, earnings and valuation.
Mercantile Bank pays an annual dividend of $ 1.24 per share and has a dividend yield of 3.9%. First National pays an annual dividend of $ 0.56 per share and has a dividend yield of 3.1%. Mercantile Bank pays out 35.0% of its earnings in the form of a dividend. First National pays out 27.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Mercantile Bank has raised its dividend for 8 consecutive years and First National has raised its dividend for 7 consecutive years. Mercantile Bank is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation & Earnings:
This table compares Mercantile Bank and First National’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue:||Price / Sales Ratio:||Net Income:||Earnings Per Share:||Price / Earnings Ratio:|
|Mercantile Bank:||$ 199.71 million:||2.54:||$ 59.02 million:||$ 3.54:||9.05:|
|First National:||$ 47.32 million:||2.38:||$ 10.36 million:||$ 2.02:||8.91:|
Mercantile Bank has higher revenues and earnings than First National. First National is trading at a lower price-to-earnings ratio than Mercantile Bank, indicating that it is currently the most affordable of the two stocks.
Volatility & Risk:
Mercantile Bank has a beta of 1, indicating that its stock price has a similar volatility profile to the S&P 500.Comparatively, First National has a beta of 0.49, indicating that its stock price is 51% less volatile than the S&P 500.
This table compares Mercantile Bank and First National’s net margins, return on equity and return on assets.
|Net Margins:||Return on Equity:||Return on Assets:|
This is a summary of recent ratings for Mercantile Bank and First National, as provided by MarketBeat.com.
|Sell Ratings:||Hold Ratings:||Buy Ratings:||Strong Buy Ratings:||Rating Score:|
Mercantile Bank presently has a consensus target price of $ 44.00, suggesting a potential upside of 37.37%. First National has a consensus target price of $ 51.00, suggesting a potential upside of 183.33%. Given First National’s higher possible upside, analysts clearly believe First National is more favorable than Mercantile Bank.
Institutional & Insider Ownership:
52.9% of Mercantile Bank shares are held by institutional investors. Comparatively, 38.0% of First National shares are held by institutional investors. 3.6% of Mercantile Bank shares are held by insiders. Comparatively, 15.7% of First National shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Mercantile Bank beats First National on 14 of the 17 factors compared between the two stocks.
Mercantile Bank Company Profile: (Get Rating)
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 offers 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 installation loan. In addition, it provides 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, as well as owns 22 automated teller machines and 19 video banking machines. As of January 18, 2022, the company operated 44 banking offices. Mercantile Bank Corporation was incorporated in 1997 and is headquartered in Grand Rapids, Michigan.
First National Company Profile: (Get Rating)
First National Corporation operates as the bank holding company for First Bank that provides various commercial banking services to small and medium-sized businesses, individuals, estates, local governmental entities, and non-profit organizations in Virginia. The company deposit products include checking, savings, money market, and individual retirement accounts, as well as certificates of deposit and treasury management solutions. Its loan products comprise construction loans, including residential, land acquisition, and development loans; 1-4 family residential real estate loans; and commercial real estate loans that are secured by commercial real estate, including multi-family residential buildings, office and retail buildings, hotels, industrial buildings, and religious facilities. The company loan products also include commercial and industrial loans that are secured by business assets, such as receivable accounts, equipment, and inventory; home equity loans; and secured and unsecured consumer loans, such as lines of credit, automobile loans, deposit account loans, and installment and demand loans. In addition, it provides wealth management services, including estate planning, investment management of assets, trustee under an agreement, trustee under a will, and estate settlement. Further, the company offers title insurance and investment services; and holds other real estate owned and office sites, as well as provides internet and mobile banking, remote deposit capture, and other traditional banking services. It serves customers through 20 bank branch offices, a loan production office, and a customer service center, as well as through a network of ATMs. The company was founded in 1907 and is headquartered in Strasburg, Virginia.
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