Mercantile Bank (NASDAQ:MBWM) & BOK Financial (BOKF) Head to Head Analysis

BOK Financial (NASDAQ: BOKF) and Mercantile Bank (NASDAQ:MBWM) are both financials companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, dividends, institutional ownership, analyst recommendations, valuation, earnings and risk.

Institutional & Insider Ownership

31.6% of BOK Financial shares are owned by institutional investors. Comparatively, 51.8% of Mercantile Bank shares are owned by institutional investors. 62.0% of BOK Financial shares are owned by company insiders. Comparatively, 3.2% of Mercantile Bank shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
BOK Financial 20.14% 10.05% 1.06%
Mercantile Bank 21.64% 8.78% 1.00%

Dividends

BOK Financial pays an annual dividend of $1.80 per share and has a dividend yield of 1.9%. Mercantile Bank pays an annual dividend of $0.76 per share and has a dividend yield of 2.2%. BOK Financial pays out 37.7% of its earnings in the form of a dividend. Mercantile Bank pays out 40.0% 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 13 consecutive years. Mercantile Bank is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares BOK Financial and Mercantile Bank’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
BOK Financial $1.67 billion 3.77 $334.64 million $4.77 20.15
Mercantile Bank $144.54 million 4.05 $31.27 million $1.90 18.59

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

Analyst Ratings

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BOK Financial 0 7 1 0 2.13
Mercantile Bank 0 4 0 0 2.00

BOK Financial currently has a consensus target price of $96.63, suggesting a potential upside of 0.54%. Mercantile Bank has a consensus target price of $36.63, suggesting a potential upside of 3.69%. Given Mercantile Bank’s higher probable upside, analysts plainly believe Mercantile Bank is more favorable than BOK Financial.

Summary

BOK Financial beats Mercantile Bank on 10 of the 16 factors compared between the two stocks.

BOK Financial Company Profile

BOK Financial Corporation is a financial holding company. The Company offers full service banking in Oklahoma, Texas, New Mexico, Northwest Arkansas, Colorado, Arizona and Kansas/Missouri. The Company’s segments include Commercial Banking, Consumer Banking, Wealth Management, and Funds Management and Other. The Commercial Banking segment includes lending, treasury and cash management services, and customer risk management products for small businesses, middle market and commercial customers. The Commercial Banking segment also includes the TransFund Electronic Funds Network. The Consumer Banking segment includes retail lending and deposit services, lending and deposit services to small business customers served through the retail branch network and all mortgage banking activities. The Wealth Management segment provides fiduciary services, private bank services and investment advisory services in all markets.

Mercantile Bank Company Profile

Mercantile Bank Corporation is a bank holding company. The Company owns the Mercantile Bank of Michigan (the Bank). The Bank is a state banking company. The Bank provides commercial banking services primarily to small- to medium-sized businesses and retail banking services. The Bank makes secured and unsecured commercial, construction, mortgage and consumer loans, and accepts checking, savings and time deposits. The Bank also enables customers to conduct certain loan and deposit transactions by personal computer and through mobile applications. Courier service is provided to certain commercial customers, and safe deposit facilities are available at its office locations. The Bank’s commercial lending group originates commercial loans and leases primarily in its market areas. The Bank’s primary deposit products are checking, savings and term certificate accounts.

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