Comparing Mercantile Bank (NASDAQ:MBWM) & Primis Financial (NASDAQ:FRST)

Mercantile Bank (NASDAQ:MBWMGet Rating) and Primis Financial (NASDAQ:FRSTGet Rating) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, earnings, institutional ownership, valuation, risk, analyst recommendations and dividends.

Dividends

Mercantile Bank pays an annual dividend of $1.28 per share and has a dividend yield of 3.7%. Primis Financial pays an annual dividend of $0.40 per share and has a dividend yield of 3.3%. Mercantile Bank pays out 33.2% of its earnings in the form of a dividend. Primis Financial pays out 44.4% 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. Mercantile Bank is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

Mercantile Bank has a beta of 0.98, suggesting that its share price is 2% less volatile than the S&P 500. Comparatively, Primis Financial has a beta of 0.79, suggesting that its share price is 21% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for Mercantile Bank and Primis Financial, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mercantile Bank 0 1 1 0 2.50
Primis Financial 0 1 0 0 2.00

Mercantile Bank currently has a consensus target price of $37.33, suggesting a potential upside of 9.35%. Primis Financial has a consensus target price of $13.00, suggesting a potential upside of 8.51%. Given Mercantile Bank’s stronger consensus rating and higher probable upside, research analysts plainly believe Mercantile Bank is more favorable than Primis Financial.

Institutional & Insider Ownership

55.5% of Mercantile Bank shares are held by institutional investors. Comparatively, 71.2% of Primis Financial shares are held by institutional investors. 3.6% of Mercantile Bank shares are held by insiders. Comparatively, 10.6% of Primis Financial shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Mercantile Bank and Primis Financial’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Mercantile Bank $213.92 million 2.53 $61.06 million $3.85 8.87
Primis Financial $124.38 million 2.38 $31.25 million $0.90 13.31

Mercantile Bank has higher revenue and earnings than Primis Financial. Mercantile Bank is trading at a lower price-to-earnings ratio than Primis Financial, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Mercantile Bank and Primis Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Mercantile Bank 28.55% 14.29% 1.20%
Primis Financial 17.21% 5.78% 0.70%

Summary

Mercantile Bank beats Primis Financial on 14 of the 17 factors compared between the two stocks.

About Mercantile Bank

(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 instalment loans. 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.

About Primis Financial

(Get Rating)

Primis Financial Corp. is a holding company, which engages in the provision of financial services through its subsidiary Sonabank. The firm focuses on making loans secured primarily by commercial real estate and other types of secured and unsecured commercial loans to small and medium-sized businesses in a number of industries, as well as loans to individuals for a variety of purposes. It also invests in real estate related securities, including collateralized mortgage obligations and agency mortgage backed securities. The company was founded by Georgia S. Derrico and R. Roderick Porter in July 28, 2004 and is headquartered in McLean, VA.

Receive News & Ratings for Mercantile Bank Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Mercantile Bank and related companies with MarketBeat.com's FREE daily email newsletter.