MBWM Price Forecast Based on Dividend Discount Model

For dividend yielding stocks, the Dividend Discount Model (DDM) is a common valuation tool; it attempts to extrapolate a fair share price based primarily on the dividend the stock provides relative to a number of other quantiative aspects of its business. In the case of MBWM, the DDM model generated by StockNews estimates a return of negative 6.59% in comparison to its current price. To help understand and contextualize the model's evaluation of MBWM, investors may wish to consider are:

• Relative to all dividend yielding stocks in our set, Mercantile Bank Corp's dividend yield of 4.12% is in the top 23.19%.
• If we compare the valuation opportunity a dividend discount model provides relative to other dividend stocks in the Financial Services sector, Mercantile Bank Corp's expected return of -6.59% is higher than 67.06% of its fellow sector mates.
• Compared to all dividend issuing stocks in our set, MBWM has a discount rate lower than 67.06% of them (a lower discount rate is associated with lower risk).
• Based on dividend growth rate, Mercantile Bank Corp has been increasing its dividends at a faster rate than 8.85% of US-listed dividend-issuing stocks we observed.

MBWM Dividends vs. Peers