Penns Woods Bancorp (NASDAQ:PWOD) and Mercantile Bank (NASDAQ:MBWM) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their valuation, profitability, risk, institutional ownership, analyst recommendations, earnings and dividends.
Earnings & Valuation
This table compares Penns Woods Bancorp and Mercantile Bank’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Penns Woods Bancorp||$68.21 million||2.88||$14.71 million||N/A||N/A|
|Mercantile Bank||$160.99 million||3.27||$42.02 million||$2.53||12.65|
Volatility and Risk
Penns Woods Bancorp has a beta of 0.61, indicating that its stock price is 39% less volatile than the S&P 500. Comparatively, Mercantile Bank has a beta of 0.77, indicating that its stock price is 23% less volatile than the S&P 500.
This is a summary of current ratings and price targets for Penns Woods Bancorp and Mercantile Bank, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Penns Woods Bancorp||0||0||0||0||N/A|
Mercantile Bank has a consensus price target of $36.50, indicating a potential upside of 14.03%. Given Mercantile Bank’s higher probable upside, analysts plainly believe Mercantile Bank is more favorable than Penns Woods Bancorp.
Insider and Institutional Ownership
26.2% of Penns Woods Bancorp shares are held by institutional investors. Comparatively, 54.3% of Mercantile Bank shares are held by institutional investors. 3.4% of Penns Woods Bancorp shares are held by company insiders. Comparatively, 3.2% of Mercantile Bank shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
This table compares Penns Woods Bancorp and Mercantile Bank’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Penns Woods Bancorp||21.76%||11.10%||0.96%|
Penns Woods Bancorp pays an annual dividend of $1.88 per share and has a dividend yield of 4.5%. Mercantile Bank pays an annual dividend of $1.04 per share and has a dividend yield of 3.2%. Mercantile Bank pays out 41.1% of its earnings in the form of a dividend. Mercantile Bank has increased its dividend for 6 consecutive years.
Mercantile Bank beats Penns Woods Bancorp on 10 of the 14 factors compared between the two stocks.
About Penns Woods Bancorp
Penns Woods Bancorp, Inc. operates as the bank holding company for Jersey Shore State Bank and Luzerne Bank, which provides commercial and retail banking services to individuals, partnerships, non-profit organizations, and corporations. The company accepts time, demand, and savings deposits, including super NOW accounts, statement savings accounts, money market accounts, and certificates of deposit, as well as checking accounts and IRAs. It also offers loan products comprising residential, commercial, and construction real estate loans; agricultural loans for the purchase or improvement of real estate; commercial loans for the acquisition and improvement of real estate, purchase of equipment, and working capital purposes; letters of credit; consumer loans, such as residential mortgages, home equity loans and lines, automobile financing, personal loans and lines of credit, and overdraft and check lines; and revolving credit loans with overdraft protection. In addition, the company provides securities brokerage and financial planning services, which include the sale of life insurance products, annuities, and estate planning services; property and casualty, and auto insurance products; safe deposit services; ATM services; and Internet and telephone banking services. Additionally, it engages in real estate transactions and investment activities. The company operates through a network of 26 offices located in Clinton, Lycoming, Centre, Montour, Union, and Luzerne counties, Pennsylvania. Penns Woods Bancorp, Inc. was incorporated in 1983 and is based in Williamsport, Pennsylvania.
About Mercantile Bank
Mercantile Bank Corporation operates as the bank holding company for Mercantile Bank of Michigan that provides commercial and retail banking services for 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 occupied real estate, non-owner occupied real estate, and multi-family and residential rental property loans; single-family residential real estate loans; home equity line of credit programs; and consumer loans, such as loans for new and used automobiles, boats, and credit cards, as well as overdraft protection services. In addition, it provides courier services and safe deposit facilities; repurchase agreements; 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 operates and 40 automated teller machines. The company operates 46 banking offices. Mercantile Bank Corporation was founded in 1997 and is headquartered in Grand Rapids, Michigan.
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