Examining Merchants Bancorp’s (NASDAQ:MBIN) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess MBIN’s latest performance announced on 30 September 2017 and compare these figures to its longer term trend and industry movements. View our latest analysis for Merchants Bancorp
How Did MBIN’s Recent Performance Stack Up Against Its Past?
I like to use the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This technique enables me to analyze different stocks in a uniform manner using new information. “For Merchants Bancorp, its “, latest twelve-month earnings is $39.8M, which, in comparison to the prior year’s figure, has climbed up by 30.70%. Given that these values are somewhat nearsighted, I’ve computed an annualized five-year figure for MBIN’s earnings, which stands at $34.9M. This shows that, on average, Merchants Bancorp has been able to steadily raise its net income over the last few years as well.
How has it been able to do this? Let’s take a look at if it is merely because of industry tailwinds, or if Merchants Bancorp has experienced some company-specific growth. The ascend in earnings seems to be driven by a strong top-line increase beating its growth rate of expenses. Though this brought about a margin contraction, it has made Merchants Bancorp more profitable. Scanning growth from a sector-level, the US thrifts and mortgage finance industry has been growing its average earnings by double-digit 11.49% in the prior year, and 14.84% over the past couple of years. This means whatever uplift the industry is enjoying, Merchants Bancorp is able to amplify this to its advantage.
What does this mean?
Though Merchants Bancorp’s past data is helpful, it is only one aspect of my investment thesis. While Merchants Bancorp has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I suggest you continue to research Merchants Bancorp to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for MBIN’s future growth? Take a look at our free research report of analyst consensus for MBIN’s outlook.
2. Financial Health: Is MBIN’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.