Merchants Bancorp (NASDAQ:MBIN) Stock Price Down 6.7% - Here's Why

Key Points

• Shares fell 6.7% intraday to $46.30 (low $46.78) on Wednesday, with about 61,453 shares traded—down ~79% from the average daily volume—and a prior close of $49.63.
• The company beat Q1 estimates with $1.25 EPS on $175.25M revenue, announced a $100.0 million share buyback (about 6.2% of shares) and raised its quarterly dividend to $0.11 (annualized $0.44, ~1.0% yield).
• Analyst sentiment is mixed: MarketBeat shows a consensus rating of "Moderate Buy" with a $47.25 target, while recent notes range from a Zacks upgrade to strong-buy to a Weiss downgrade to hold and price targets from $51 (Morgan Stanley) to $58 (Piper Sandler).

Merchants Bancorp (NASDAQ:MBIN - Get Free Report)'s stock price was down 6.7% during trading on Wednesday . The company traded as low as $46.78 and last traded at $46.30. Approximately 61,453 shares changed hands during mid-day trading, a decline of 79% from the average daily volume of 291,493 shares. The stock had previously closed at $49.63.

Analyst Ratings Changes

MBIN has been the subject of a number of research reports. Zacks Research raised shares of Merchants Bancorp from a "hold" rating to a "strong-buy" rating in a research note on Tuesday, February 3rd. Morgan Stanley increased their price target on shares of Merchants Bancorp from $42.00 to $51.00 and gave the company an "equal weight" rating in a research report on Monday, March 2nd. Weiss Ratings cut shares of Merchants Bancorp from a "buy (b-)" rating to a "hold (c+)" rating in a research report on Friday, April 17th. Finally, Piper Sandler restated an "overweight" rating and issued a $58.00 price objective on shares of Merchants Bancorp in a report on Wednesday. One research analyst has rated the stock with a Strong Buy rating, two have given a Buy rating and two have given a Hold rating to the company. According to MarketBeat.com, the company presently has an average rating of "Moderate Buy" and a consensus price target of $47.25.

Merchants Bancorp Trading Down 7.3%

The company has a debt-to-equity ratio of 2.22, a current ratio of 1.16 and a quick ratio of 0.86. The firm has a market capitalization of $2.11 billion, a P/E ratio of 12.18 and a beta of 1.15. The stock's 50-day simple moving average is $44.60 and its two-hundred day simple moving average is $38.49.

Merchants Bancorp (NASDAQ:MBIN - Get Free Report) last released its quarterly earnings results on Tuesday, April 28th. The company reported $1.25 EPS for the quarter, beating the consensus estimate of $1.16 by $0.09. The business had revenue of $175.25 million during the quarter, compared to analyst estimates of $174.30 million. Merchants Bancorp had a net margin of 16.02% and a return on equity of 13.17%. Equities research analysts expect that Merchants Bancorp will post 5.24 EPS for the current year.

Merchants Bancorp Increases Dividend

The company also recently announced a quarterly dividend, which was paid on Wednesday, April 1st. Shareholders of record on Friday, March 13th were given a $0.11 dividend. The ex-dividend date of this dividend was Friday, March 13th. This represents a $0.44 annualized dividend and a yield of 1.0%. This is an increase from Merchants Bancorp's previous quarterly dividend of $0.10. Merchants Bancorp's dividend payout ratio is presently 11.64%.

Merchants Bancorp declared that its Board of Directors has approved a share buyback program on Wednesday, January 28th that authorizes the company to buyback $100.00 million in shares. This buyback authorization authorizes the company to purchase up to 6.2% of its shares through open market purchases. Shares buyback programs are typically an indication that the company's board believes its stock is undervalued.

Insider Activity at Merchants Bancorp

In other news, insider Martin A. Schroeter sold 5,500 shares of the business's stock in a transaction dated Tuesday, February 10th. The stock was sold at an average price of $46.06, for a total transaction of $253,330.00. Following the completion of the transaction, the insider directly owned 10,881 shares of the company's stock, valued at approximately $501,178.86. The trade was a 33.58% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which can be accessed through the SEC website. Corporate insiders own 44.90% of the company's stock.

Hedge Funds Weigh In On Merchants Bancorp

Institutional investors and hedge funds have recently made changes to their positions in the stock. Dimensional Fund Advisors LP lifted its stake in Merchants Bancorp by 3.4% in the fourth quarter. Dimensional Fund Advisors LP now owns 1,656,898 shares of the company's stock valued at $56,433,000 after buying an additional 54,970 shares during the last quarter. Vanguard Group Inc. lifted its stake in Merchants Bancorp by 2.6% in the fourth quarter. Vanguard Group Inc. now owns 1,414,584 shares of the company's stock valued at $48,181,000 after buying an additional 36,184 shares during the last quarter. Royce & Associates LP raised its stake in shares of Merchants Bancorp by 10.2% during the third quarter. Royce & Associates LP now owns 862,119 shares of the company's stock worth $27,415,000 after purchasing an additional 79,707 shares during the last quarter. Geode Capital Management LLC raised its stake in shares of Merchants Bancorp by 2.7% during the fourth quarter. Geode Capital Management LLC now owns 715,394 shares of the company's stock worth $24,371,000 after purchasing an additional 18,925 shares during the last quarter. Finally, American Century Companies Inc. raised its stake in shares of Merchants Bancorp by 10.9% during the third quarter. American Century Companies Inc. now owns 630,077 shares of the company's stock worth $20,036,000 after purchasing an additional 62,097 shares during the last quarter. 24.57% of the stock is owned by institutional investors and hedge funds.

About Merchants Bancorp

Merchants Bancorp NASDAQ: MBIN is the bank holding company for Merchants Bank, a regional financial institution headquartered in Buffalo, New York. Through its network of branches and digital platforms, the company offers a range of banking services across western and central New York. Merchants Bancorp operates as a full‐service commercial bank, serving small and medium-sized businesses, professionals, families and individuals in its core markets.

The company's primary activities include deposit taking, commercial and consumer lending, mortgage origination, and treasury management services.

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