Analyzing Mercantil Bank (NASDAQ:AMTB) & Community Bank System (NASDAQ:CBU)

Mercantil Bank (NASDAQ:AMTB) and Community Bank System (NYSE:CBU) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, profitability, institutional ownership, earnings, risk, dividends and analyst recommendations.

Institutional and Insider Ownership

13.9% of Mercantil Bank shares are held by institutional investors. Comparatively, 71.0% of Community Bank System shares are held by institutional investors. 5.1% of Mercantil Bank shares are held by insiders. Comparatively, 2.2% of Community Bank System shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and price targets for Mercantil Bank and Community Bank System, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mercantil Bank 0 5 0 0 2.00
Community Bank System 0 2 0 0 2.00

Mercantil Bank presently has a consensus price target of $18.58, suggesting a potential downside of 11.86%. Community Bank System has a consensus price target of $63.00, suggesting a potential downside of 8.71%. Given Community Bank System’s higher probable upside, analysts plainly believe Community Bank System is more favorable than Mercantil Bank.

Profitability

This table compares Mercantil Bank and Community Bank System’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Mercantil Bank 13.91% 7.93% 0.77%
Community Bank System 27.57% 9.86% 1.60%

Earnings & Valuation

This table compares Mercantil Bank and Community Bank System’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Mercantil Bank $363.23 million 2.51 $45.83 million $1.36 15.50
Community Bank System $586.79 million 6.07 $168.64 million $3.37 20.48

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

Dividends

Community Bank System pays an annual dividend of $1.64 per share and has a dividend yield of 2.4%. Mercantil Bank does not pay a dividend. Community Bank System pays out 48.7% of its earnings in the form of a dividend.

Summary

Community Bank System beats Mercantil Bank on 11 of the 13 factors compared between the two stocks.

About Mercantil Bank

Mercantil Bank Holding Corporation operates as a bank holding company for Amerant Bank, N.A. that provides banking products and services to individuals and businesses in the United States and internationally. The company operates through four segments: Personal and Commercial Banking, Corporate LATAM, Treasury, and Institutional. It offers a range of checking and savings accounts, certificates of deposit, and money market accounts. The company also provides variable and fixed rate commercial real estate loans; loans secured by owner-occupied properties; loans to domestic and foreign individuals primarily secured by personal residence; working capital loans, asset-based lending, participations in shared national credits, purchased receivables, and small business administration loans; loans to financial institutions and acceptances; and consumer loans and overdrafts. In addition, it offers trust and estate planning products and services, brokerage and investment advisory services in global capital markets, and wealth management and fiduciary services. Further, the company provides debit and credit cards; remote deposit capture, online banking, mobile banking, e-statements, night depository, direct deposit, and treasury management services; and cashier's checks, safe deposit boxes, and letters of credit. As of March 21, 2019, it operated 23 banking centers comprising 15 in South Florida and 8 in Houston, as well as loan production offices in Dallas, Texas, and New York. The company was founded in 1979 and is headquartered in Coral Gables, Florida.

About Community Bank System

Community Bank System, Inc. operates as the bank holding company for Community Bank, N.A. that provides various banking and other financial services to retail, commercial, and municipal customers. It operates through three segments: Banking, Employee Benefit Services, and All Other. The company offers various deposits products, such as checking, savings, and money market accounts, as well as time deposits. It also provides loans comprising consumer mortgages; general purpose commercial and industrial loans, and mortgages on commercial properties; installment loans that are originated through selected dealerships and are secured by automobiles, marine, and other recreational vehicles; personal installment loans and lines of credit for consumers; and home equity products. In addition, the company offers broker-dealer and investment advisory services; and asset management services to individuals, corporations, corporate pension and profit sharing plans, and foundations, as well as operates as a full-service insurance agency that offers personal and commercial property insurance, and other risk management products and services. Further, it offers contribution plan administration services, actuarial and benefits consulting services, and collective investment fund administration and institutional trust services, as well as employee benefit trust, retirement plan administration, VEBA/HRA, and health and welfare consulting services. Additionally, the company provides wealth management, higher educational planning, fiduciary, risk management, and personal financial planning services; and investment alternatives, including stocks, bonds, mutual funds, and advisory products, as well as transfer agency and master recordkeeping services. As of December 31, 2018, it had 224 branches in Upstate New York, as well as Northeastern Pennsylvania, Vermont, and Western Massachusetts. Community Bank System, Inc. was founded in 1866 and is headquartered in DeWitt, New York.

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