Head to Head Review: Hancock Whitney (NASDAQ:HWC) & Mercantile Bank (NASDAQ:MBWM)

Mercantile Bank (NASDAQ:MBWM) and Hancock Whitney (NASDAQ:HWC) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, dividends, profitability, risk and earnings.

Dividends

Mercantile Bank pays an annual dividend of $1.60 per share and has a dividend yield of 2.6%. Hancock Whitney pays an annual dividend of $2.00 per share and has a dividend yield of 2.6%. Mercantile Bank pays out 28.2% of its earnings in the form of a dividend. Hancock Whitney pays out 39.2% 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 14 consecutive years and Hancock Whitney has raised its dividend for 3 consecutive years.

Earnings and Valuation

This table compares Mercantile Bank and Hancock Whitney”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mercantile Bank	$371.80 million	2.87	$88.75 million	$5.68	10.88
Hancock Whitney	$2.02 billion	3.01	$486.07 million	$5.10	14.89

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

Analyst Recommendations

This is a summary of current recommendations for Mercantile Bank and Hancock Whitney, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mercantile Bank	0	4	3	0	2.43
Hancock Whitney	0	3	7	1	2.82

Mercantile Bank presently has a consensus price target of $62.00, indicating a potential upside of 0.37%. Hancock Whitney has a consensus price target of $83.78, indicating a potential upside of 10.34%. Given Hancock Whitney’s stronger consensus rating and higher possible upside, analysts clearly believe Hancock Whitney is more favorable than Mercantile Bank.

Insider and Institutional Ownership

58.6% of Mercantile Bank shares are owned by institutional investors. Comparatively, 81.2% of Hancock Whitney shares are owned by institutional investors. 2.5% of Mercantile Bank shares are owned by insiders. Comparatively, 0.9% of Hancock Whitney shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Mercantile Bank	24.75%	13.66%	1.46%
Hancock Whitney	21.81%	11.36%	1.41%

Volatility & Risk

Mercantile Bank has a beta of 0.8, meaning that its stock price is 20% less volatile than the S&P 500. Comparatively, Hancock Whitney has a beta of 0.94, meaning that its stock price is 6% less volatile than the S&P 500.

Summary

Hancock Whitney beats Mercantile Bank on 11 of the 18 factors compared between the two stocks.

About Mercantile Bank

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 provides 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 offers 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. The company was incorporated in 1997 and is headquartered in Grand Rapids, Michigan.

About Hancock Whitney

Hancock Whitney Corporation operates as the financial holding company for Hancock Whitney Bank that provides traditional and online banking services to commercial, small business, and retail customers. It offers various transaction and savings deposit products consisting of brokered deposits, time deposits, and money market accounts; treasury management services, secured and unsecured loan products including revolving credit facilities, and letters of credit and similar financial guarantees; and trust and investment management services to retirement plans, corporations, and individuals, and investment advisory and brokerage products. The company also provides commercial and industrial loans including real and non-real estate loans; construction and land development loans; and residential mortgages, as well as consumer loans. In addition, it offers commercial finance products to middle market and corporate clients, including leases and related structures; facilitates investments in new market tax credit activities and holding certain foreclosed assets; provides customers access to fixed annuity and life insurance products; and underwriting transactions products, as well as debt and mortgage-related securities. The company was founded in 1899 and is headquartered in Gulfport, Mississippi.