OTCPK:MFGI

Stock Analysis Report

Merchants Financial Group

Executive Summary

Merchants Financial Group, Inc. operates as the bank holding company for Merchants Bank, National Association that provides various banking products and services to individual and business customers in the United States.

Rewards

Trading at 25.4% below its fair value

Pays a reliable dividend of 3.12%

Risk Analysis

Latest financial reports are more than 6 months old



Snowflake Analysis

Undervalued with excellent balance sheet and pays a dividend.


Similar Companies

Share Price & News

How has Merchants Financial Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: MFGI has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0%

MFGI

2.7%

US Banks

1.1%

US Market


1 Year Return

1.4%

MFGI

22.7%

US Banks

17.8%

US Market

Return vs Industry: MFGI underperformed the US Banks industry which returned 22.7% over the past year.

Return vs Market: MFGI underperformed the US Market which returned 17.8% over the past year.


Shareholder returns

MFGIIndustryMarket
7 Day0%2.7%1.1%
30 Day1.0%0.9%1.4%
90 Day0%10.0%3.9%
1 Year3.4%1.4%26.3%22.7%20.3%17.8%
3 Year51.2%41.0%31.8%22.6%44.8%35.4%
5 Year103.0%80.5%80.2%60.2%71.3%52.4%

Price Volatility Vs. Market

How volatile is Merchants Financial Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Merchants Financial Group undervalued compared to its fair value and its price relative to the market?

25.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: MFGI ($74) is trading below our estimate of fair value ($99.17)

Significantly Below Fair Value: MFGI is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: MFGI is good value based on its PE Ratio (10.4x) compared to the Banks industry average (12.7x).

PE vs Market: MFGI is good value based on its PE Ratio (10.4x) compared to the US market (18.4x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate MFGI's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: MFGI is good value based on its PB Ratio (1.1x) compared to the US Banks industry average (1.2x).


Next Steps

Future Growth

How is Merchants Financial Group forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

0.5%

Forecasted Banks industry annual growth in earnings


In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Merchants Financial Group has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


Next Steps

  • Examine whether Merchants Financial Group is trading at an attractive price based on how much it is expected to earn in the future, and relative to its industry peers and the wider market.
  • While we do not consider unaudited financials to be a reliable enough to include in our analysis, you can access them on the OTC Markets Website. If you are looking for more of a qualitative research into the company, you can access Merchants Financial Group's filings and announcements here.
  • Explore growth companies in the Banks industry.

Past Performance

How has Merchants Financial Group performed over the past 5 years?

11.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: MFGI has high quality earnings.

Growing Profit Margin: MFGI's current net profit margins (22.2%) are lower than last year (26.6%).


Past Earnings Growth Analysis

Earnings Trend: MFGI's earnings have grown by 11.8% per year over the past 5 years.

Accelerating Growth: MFGI's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: MFGI had negative earnings growth (-9.5%) over the past year, making it difficult to compare to the Banks industry average (27.1%).


Return on Equity

High ROE: MFGI's Return on Equity (10.6%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Merchants Financial Group's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: MFGI has a low level of unsold assets or inventory.

Debt Coverage by Assets: MFGI's debt is not covered by short term assets (assets are 0.7x debt).


Financial Institutions Analysis

Asset Level: MFGI's level of assets compared to its equity is low.

Allowance for Bad Loans: MFGI has a low allowance for bad loans.

Low Risk Liabilities: MFGI's liabilities are made up of primarily low risk sources of funding.

Loan Level: MFGI has an acceptable proportion of non-loan assets held.

Low Risk Deposits: MFGI's loans are broadly funded by customer deposits.

Level of Bad Loans: MFGI has an appropriate level of bad loans (1.91%)


Next Steps

Dividend

What is Merchants Financial Group's current dividend yield, its reliability and sustainability?

3.12%

Current Dividend Yield


Dividend Yield vs Market

company3.1%marketbottom25%1.4%markettop25%3.7%industryaverage2.8%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: MFGI's dividend (3.12%) is higher than the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: MFGI's dividend (3.12%) is low compared to the top 25% of dividend payers in the US market (3.67%).


Stability and Growth of Payments

Stable Dividend: MFGI's dividends per share have been stable in the past 10 years.

Growing Dividend: MFGI's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (32.5%), MFGI's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

What is the CEO of Merchants Financial Group's salary, the management and board of directors tenure and is there insider trading?

11.9yrs

Average board tenure


CEO

Greg Evans (56yo)

2.8yrs

Tenure

0

Mr. Gregory M. Evans, also known as Greg, has been the Chief Executive Officer and President at Merchants Financial Group, Inc. and Merchants Bank since February 2017. Mr. Evans serves as President and CEO ...


Board Age and Tenure

11.9yrs

Average Tenure

60yo

Average Age

Experienced Board: MFGI's board of directors are seasoned and experienced ( 11.9 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Rod Nelsestuen (68yo)

    Chief Information Officer and Senior VP

    • Tenure: 0yrs
  • Susan Hovell

    Senior Vice President of Retail Performance at Merchants Bank

    • Tenure: 0yrs
  • Greg Evans (56yo)

    President

    • Tenure: 2.8yrs
  • Mark McGrory (61yo)

    Chief Credit Officer & Senior VP

    • Tenure: 0yrs
  • James Friedl

    Regional President of Southeast Region-Merchants Bank NA

    • Tenure: 0yrs
  • Cindy Harrison

    Senior Vice President & Credit Administration Manager

    • Tenure: 0yrs
  • Mary Gordon

    Vice President & Director of Marketing

    • Tenure: 0yrs
  • Sue Savat (52yo)

    Senior VP & CFO

    • Tenure: 10.9yrs
  • Shannon Spahr

    Vice President & Controller

    • Tenure: 0yrs

Board Members

  • Rick Lommen (53yo)

    Independent Director

    • Tenure: 11.9yrs
  • Scott Biesanz (69yo)

    Chairman of the Board

    • Tenure: 7.7yrs
  • Ken Mogren (70yo)

    Independent Director

    • Tenure: 14.9yrs
  • Michael Cichanowski (70yo)

    Independent Director

    • Tenure: 16.9yrs
  • James Trenda

    Independent Director

    • Tenure: 12.9yrs
  • Greg Evans (56yo)

    President

    • Tenure: 2.8yrs
  • Bruce Ryan (60yo)

    Independent Director

    • Tenure: 13.9yrs
  • Ann Merchlewitz (60yo)

    Independent Director

    • Tenure: 1.7yrs
  • John Killen (56yo)

    Independent Director

    • Tenure: 0.7yrs

Company Information

Merchants Financial Group, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Merchants Financial Group, Inc.
  • Ticker: MFGI
  • Exchange: OTCPK
  • Founded: 1875
  • Industry: Regional Banks
  • Sector: Banks
  • Market Cap: US$197.391m
  • Shares outstanding: 2.67m
  • Website: https://www.merchantsbank.com

Number of Employees


Location

  • Merchants Financial Group, Inc.
  • 102 East Third Street
  • Winona
  • Minnesota
  • 55987
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
MFGIOTCPK (Pink Sheets LLC)YesCommon StockUSUSDOct 1990

Biography

Merchants Financial Group, Inc. operates as the bank holding company for Merchants Bank, National Association that provides various banking products and services to individual and business customers in the ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/10 23:40
End of Day Share Price2019/12/06 00:00
Earnings2018/12/31
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.