Head to Head Analysis: Deutsche Bank (NYSE:DB) & Mercantile Bank (NYSE:MBWM)

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

Dividends

Mercantile Bank pays an annual dividend of $1.08 per share and has a dividend yield of 3.1%. Deutsche Bank does not pay a dividend. Mercantile Bank pays out 42.7% of its earnings in the form of a dividend.

Profitability

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

Net Margins Return on Equity Return on Assets
Deutsche Bank -11.99% -6.33% -0.30%
Mercantile Bank 26.36% 11.39% 1.26%

Institutional & Insider Ownership

21.8% of Deutsche Bank shares are held by institutional investors. Comparatively, 55.0% of Mercantile Bank shares are held by institutional investors. 3.2% of Mercantile Bank shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Deutsche Bank 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
Deutsche Bank $43.60 billion 0.34 $314.15 million ($0.01) -719.00
Mercantile Bank $160.99 million 3.56 $42.02 million $2.53 13.87

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

Risk and Volatility

Deutsche Bank has a beta of 1.56, indicating that its stock price is 56% more volatile than the S&P 500. Comparatively, Mercantile Bank has a beta of 0.84, indicating that its stock price is 16% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and target prices for Deutsche Bank and Mercantile Bank, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Deutsche Bank 7 7 0 0 1.50
Mercantile Bank 0 1 0 0 2.00

Deutsche Bank presently has a consensus price target of $6.89, suggesting a potential downside of 4.24%. Mercantile Bank has a consensus price target of $36.50, suggesting a potential upside of 4.05%. Given Mercantile Bank’s stronger consensus rating and higher possible upside, analysts clearly believe Mercantile Bank is more favorable than Deutsche Bank.

Summary

Mercantile Bank beats Deutsche Bank on 11 of the 15 factors compared between the two stocks.

Deutsche Bank Company Profile

Deutsche Bank Aktiengesellschaft provides investment, financial, and related products and services to private individuals, corporate entities, and institutional clients worldwide. It operates through three segments: Corporate & Investment Bank (CIB), Private & Commercial Bank (PCB), and Deutsche Asset Management. The company's CIB segment offers financial market products, such as bonds, equities and equity-linked products, exchange-traded and over-the-counter derivatives, foreign exchange, money market instruments, and structured products. This segment also offers commercial banking, mergers and acquisitions, debt and equity advisory and origination, and cash management services; and trade finance and securities services. Its PCB segment offers payment and current account services, investment and insurance products, deposits, and credit and financing products; mid-cap related products; customized wealth management and investment solutions consisting of discretionary portfolio management, investment advices, and currency and deposit services; start-up and structured financing; interest rate and currency management services; and postal and non-banking services. This segment also offers financing solutions, such as real estate, single-stock, and aircraft financing; and mergers and acquisitions, pre-IPO, private placements, private and public investment solutions, structured lending, and trading and hedging products. In addition, the PCB segment provides wealth structuring, wealth transfer, and philanthropy services. Its Deutsche Asset Management segment invests in equities, fixed income, liquidity, real estate, infrastructure, private equity, and sustainable investments; and delivers alpha and beta solutions. As of December 31, 2017, the company operated 2,425 branches in 60 countries. Deutsche Bank Aktiengesellschaft was founded in 1870 and is headquartered in Frankfurt am Main, Germany.

Mercantile Bank Company Profile

Mercantile Bank Corporation operates as the bank holding company for Mercantile Bank of Michigan that provides commercial and retail banking services for 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 offers commercial and industrial loans; vacant land, land development, and residential construction loans; owner occupied real estate, non-owner occupied real estate, and multi-family and residential rental property loans; single-family residential real estate loans; home equity line of credit programs; and consumer loans, such as loans for new and used automobiles, boats, and credit cards, as well as overdraft protection services. In addition, it provides courier services and safe deposit facilities; repurchase agreements; 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, as well as operates and 40 automated teller machines. The company operates 46 banking offices. Mercantile Bank Corporation was founded in 1997 and is headquartered in Grand Rapids, Michigan.

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