Analyzing Merchants Bancshares,Inc. (MBVT) & S&T Bancorp (STBA)

Merchants Bancshares,Inc. (NASDAQ: MBVT) and S&T Bancorp (NASDAQ:STBA) are both financials companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, valuation, risk, analyst recommendations, earnings, dividends and profitability.

Analyst Ratings

This is a breakdown of current ratings and target prices for Merchants Bancshares,Inc. and S&T Bancorp, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Merchants Bancshares,Inc. 0 0 0 0 N/A
S&T Bancorp 0 3 0 0 2.00

S&T Bancorp has a consensus price target of $39.00, suggesting a potential downside of 4.62%. Given S&T Bancorp’s higher possible upside, analysts clearly believe S&T Bancorp is more favorable than Merchants Bancshares,Inc..

Profitability

This table compares Merchants Bancshares,Inc. and S&T Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Merchants Bancshares,Inc. 20.64% 9.19% 0.71%
S&T Bancorp 26.44% 9.41% 1.15%

Volatility & Risk

Merchants Bancshares,Inc. has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500. Comparatively, S&T Bancorp has a beta of 0.86, meaning that its stock price is 14% less volatile than the S&P 500.

Earnings & Valuation

This table compares Merchants Bancshares,Inc. and S&T Bancorp’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Merchants Bancshares,Inc. N/A N/A N/A $2.15 23.16
S&T Bancorp $248.46 million 5.76 $81.50 million $2.33 17.55

S&T Bancorp has higher revenue and earnings than Merchants Bancshares,Inc.. S&T Bancorp is trading at a lower price-to-earnings ratio than Merchants Bancshares,Inc., indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

38.6% of Merchants Bancshares,Inc. shares are owned by institutional investors. Comparatively, 54.0% of S&T Bancorp shares are owned by institutional investors. 8.8% of Merchants Bancshares,Inc. shares are owned by company insiders. Comparatively, 2.7% of S&T Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Dividends

Merchants Bancshares,Inc. pays an annual dividend of $1.12 per share and has a dividend yield of 2.2%. S&T Bancorp pays an annual dividend of $0.80 per share and has a dividend yield of 2.0%. Merchants Bancshares,Inc. pays out 52.1% of its earnings in the form of a dividend. S&T Bancorp pays out 34.3% 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.

Summary

S&T Bancorp beats Merchants Bancshares,Inc. on 8 of the 11 factors compared between the two stocks.

About Merchants Bancshares,Inc.

Merchants Bancshares, Inc. is a bank holding company. The Company’s subsidiary, Merchants Bank (the Bank), is a commercial bank. The Bank offers a range of deposit, loan, cash management and trust services to meet the financial needs of individual consumers, businesses and municipalities. Merchants Bank’s trust division offers investment management, financial planning and trustee services. The Bank offers commercial, financial and agricultural loans, municipal loans, residential real estate loans, commercial real estate loans, construction real estate loans and consumer installment loans for various personal needs, including vehicle and boat financing. The Bank’s deposits include demand; savings and interest bearing checking and money market accounts, and time deposits.

About S&T Bancorp

S&T Bancorp, Inc. (S&T) is a bank holding company. The Company operates through three segments: Community Banking, Wealth Management and Insurance. The Community Banking segment offers services, which include accepting time and demand deposits, and originating commercial and consumer loans. The Wealth Management segment offers brokerage services, serves as executor and trustee under wills and deeds and as guardian and custodian of employee benefits and provides other trust services. In addition, it is a registered investment advisor that manages private investment accounts for individuals and institutions. The insurance segment includes an insurance agency offering commercial property and casualty insurance, group life and health coverage, employee benefit solutions and personal insurance lines. The Company’s subsidiaries include S&T Bank, 9th Street Holdings, Inc. and STBA Capital Trust I.

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