First Merchants Corporation (NASDAQ: FRME) is one of 338 publicly-traded companies in the “Banks” industry, but how does it compare to its competitors? We will compare First Merchants Corporation to similar businesses based on the strength of its valuation, institutional ownership, analyst recommendations, earnings, profitability, dividends and risk.

Valuation and Earnings

This table compares First Merchants Corporation and its competitors gross revenue, earnings per share (EPS) and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
First Merchants Corporation $318.52 million $81.05 million 18.50
First Merchants Corporation Competitors $5.90 billion $873.31 million 347.05

First Merchants Corporation’s competitors have higher revenue and earnings than First Merchants Corporation. First Merchants Corporation is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Risk and Volatility

First Merchants Corporation has a beta of 0.92, suggesting that its share price is 8% less volatile than the S&P 500. Comparatively, First Merchants Corporation’s competitors have a beta of 0.82, suggesting that their average share price is 18% less volatile than the S&P 500.

Insider and Institutional Ownership

67.8% of First Merchants Corporation shares are owned by institutional investors. Comparatively, 52.0% of shares of all “Banks” companies are owned by institutional investors. 1.4% of First Merchants Corporation shares are owned by company insiders. Comparatively, 10.3% of shares of all “Banks” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Dividends

First Merchants Corporation pays an annual dividend of $0.72 per share and has a dividend yield of 1.8%. First Merchants Corporation pays out 33.0% of its earnings in the form of a dividend. As a group, “Banks” companies pay a dividend yield of 2.0% and pay out 34.7% of their earnings in the form of a dividend.

Profitability

This table compares First Merchants Corporation and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
First Merchants Corporation 26.28% 10.38% 1.33%
First Merchants Corporation Competitors 18.85% 8.80% 0.94%

Analyst Recommendations

This is a breakdown of current ratings and target prices for First Merchants Corporation and its competitors, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Merchants Corporation 0 1 1 0 2.50
First Merchants Corporation Competitors 2275 9242 9424 403 2.37

First Merchants Corporation currently has a consensus price target of $46.50, suggesting a potential upside of 15.33%. As a group, “Banks” companies have a potential downside of 4.25%. Given First Merchants Corporation’s stronger consensus rating and higher possible upside, research analysts clearly believe First Merchants Corporation is more favorable than its competitors.

Summary

First Merchants Corporation beats its competitors on 9 of the 15 factors compared.

About First Merchants Corporation

First Merchants Corporation is a financial holding company. The Company has a bank charter, First Merchants Bank (the Bank), which is opened for business in Muncie, Indiana. It operates through community banking business segment. The Bank also operates Lafayette Bank and Trust, and First Merchants Private Wealth Advisors (each as a division of First Merchants Bank). As of July 17, 2017, the Bank included 122 banking centers in Indiana, Illinois and Ohio counties. In addition to its branch network, the Company’s delivery channels include automated teller machines, check cards and Internet technology. Through the Bank, it offers a range of financial services, including accepting time deposits, savings and demand deposits; making consumer, commercial and real estate mortgage loans; renting safe deposit facilities; providing personal and corporate trust services, and providing other corporate services, letters of credit and repurchase agreements.

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