Our analysis is based on comparing Mercantile Bank Corp. with the following peers – Chemical Financial Corporation, Independent Bank Corporation, Macatawa Bank Corporation, Mackinac Financial Corporation, MBT Financial Corp., Fifth Third Bancorp, Pacific Basin Shipping Limited Unsponsored ADR, 1st Source Corporation, Lightbridge Corporation and Genco Shipping & Trading Ltd (CHFC-US, IBCP-US, MCBC-US, MFNC-US, MBTF-US, FITB-US, PCFBY-US, SRCE-US, LTBR-US and GNK-US).
Mercantile Bank Corp.’s dividend yield is 4.36 percent and its dividend payout is 35.98 percent. This compares to a peer median dividend yield of 2.34 percent and a payout level of 31.24 percent. This type of dividend performance might make it a good stock for dividend investors. However, the company’s average dividend quality score of 42 out of a possible score of 100, points to some weakness in the sustainability of its robust payout ratio, and makes its less attractive for dividend investors seeking current income.
Dividend Quality Overview
- Over the last twelve months (prior to March 31, 2017), MBWM-US paid a low quality dividend, which represents a yield of 2.18% at the current price.
- Dividend quality trend has not been consistent over the last five years. Dividends were paid during each of these years — of these 1 was high quality, 3 were medium quality and 1 was low quality.
- The ending cash balance, with a dividend coverage of 2.11x, provides a moderate cushion in case of a significant reduction of cash flows in the future.
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Over the last twelve months (prior to March 31, 2017), MBWM-US paid a low quality dividend.
The source of the company’s cash to support the dividend paid over the last twelve months is operating cash flow (coverage of 1.55x), investing cash flow (coverage of -7.65x), issuance cash flow (coverage of 4.58x) and twelve-month prior cash (coverage of 2.01x), for a total dividend coverage of 3.11x.
These coverage ratio factors imply that the firm had to dip into the beginning cash balance to pay the dividend, which suggests a low dividend quality.
|Dividend Yield (%)||0.54||2.06||6.86||2.37||3.03||4.36|
|Dividend Payout (%)||6.92||23.08||37.5||35.8||33.67||35.98|
A complete list of metrics and analysis is available on the company page.
Mercantile Bank Corp. operates as a bank holding company for Mercantile Bank of Michigan. It offers checking and savings accounts, credit and debit cards, mobile and Internet banking, business loans, mobile wallet, health savings account, and treasury management services. The company was founded on July 15, 1997 and is headquartered in Grand Rapids, MI.
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