FIRST MERCHANTS CORP (FRME) Stock Fundamental Analysis
NASDAQ:FRME - Nasdaq - US3208171096 - Common Stock - Currency: USD
Overall FRME gets a fundamental rating of 4 out of 10. We evaluated FRME against 398 industry peers in the Banks industry. There are concerns on the financial health of FRME while its profitability can be described as average. FRME has a valuation in line with the averages, but it does not seem to be growing. Finally FRME also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year FRME was profitable.
FRME had a positive operating cash flow in the past year.
FRME had positive earnings in each of the past 5 years.
Each year in the past 5 years FRME had a positive operating cash flow.
1.2 Ratios
FRME's Return On Assets of 1.09% is fine compared to the rest of the industry. FRME outperforms 72.61% of its industry peers.
FRME has a Return On Equity of 8.66%. This is comparable to the rest of the industry: FRME outperforms 53.02% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.09% | ||
| ROE | 8.66% | ||
| ROIC | N/A |
ROA(3y)1.18%
ROA(5y)1.18%
ROE(3y)9.79%
ROE(5y)9.61%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
Looking at the Profit Margin, with a value of 30.85%, FRME belongs to the top of the industry, outperforming 83.67% of the companies in the same industry.
FRME's Profit Margin has declined in the last couple of years.
FRME does not have Operating Margin and Gross Margin available, so we won't be analyzing them here.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | N/A | ||
| PM (TTM) | 30.85% | ||
| GM | N/A |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3Y-7.92%
PM growth 5Y-3.62%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
FRME does not have a ROIC to compare to the WACC, probably because it is not profitable.
FRME has less shares outstanding than it did 1 year ago.
The number of shares outstanding for FRME has been increased compared to 5 years ago.
FRME has a worse debt/assets ratio than last year.
2.2 Solvency
FRME has a debt to FCF ratio of 1.26. This is a very positive value and a sign of high solvency as it would only need 1.26 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.26, FRME is in the better half of the industry, outperforming 68.34% of the companies in the same industry.
A Debt/Equity ratio of 0.15 indicates that FRME is not too dependend on debt financing.
The Debt to Equity ratio of FRME (0.15) is better than 61.31% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.15 | ||
| Debt/FCF | 1.26 | ||
| Altman-Z | N/A |
ROIC/WACCN/A
WACC17.61%
2.3 Liquidity
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | N/A | ||
| Quick Ratio | N/A |
3. Growth
3.1 Past
The earnings per share for FRME have decreased by -9.76% in the last year.
FRME shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -0.72% yearly.
FRME shows a decrease in Revenue. In the last year, the revenue decreased by -0.66%.
Measured over the past years, FRME shows a small growth in Revenue. The Revenue has been growing by 7.84% on average per year.
EPS 1Y (TTM)-9.76%
EPS 3Y-5.26%
EPS 5Y-0.72%
EPS Q2Q%10.59%
Revenue 1Y (TTM)-0.66%
Revenue growth 3Y7.54%
Revenue growth 5Y7.84%
Sales Q2Q%4.31%
3.2 Future
The Earnings Per Share is expected to grow by 13.52% on average over the next years. This is quite good.
FRME is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.99% yearly.
EPS Next Y22.04%
EPS Next 2Y13.52%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year6.09%
Revenue Next 2Y4.99%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 10.96, the valuation of FRME can be described as reasonable.
Compared to the rest of the industry, the Price/Earnings ratio of FRME is on the same level as its industry peers.
FRME is valuated cheaply when we compare the Price/Earnings ratio to 28.92, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 8.74, the valuation of FRME can be described as reasonable.
Based on the Price/Forward Earnings ratio, FRME is valued a bit cheaper than 67.84% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.65. FRME is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.96 | ||
| Fwd PE | 8.74 |
4.2 Price Multiples
FRME's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. FRME is cheaper than 77.14% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.03 | ||
| EV/EBITDA | N/A |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
FRME's earnings are expected to grow with 13.52% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.5
PEG (5Y)N/A
EPS Next 2Y13.52%
EPS Next 3YN/A
5. Dividend
5.1 Amount
FRME has a Yearly Dividend Yield of 3.79%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.63, FRME pays a bit more dividend than its industry peers.
FRME's Dividend Yield is rather good when compared to the S&P500 average which is at 2.51.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.79% |
5.2 History
The dividend of FRME is nicely growing with an annual growth rate of 7.59%!
FRME has paid a dividend for at least 10 years, which is a reliable track record.
FRME has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)7.59%
Div Incr Years4
Div Non Decr Years4
5.3 Sustainability
FRME pays out 41.85% of its income as dividend. This is a bit on the high side, but may be sustainable.
FRME's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP41.85%
EPS Next 2Y13.52%
EPS Next 3YN/A
36.5
-0.42 (-1.14%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupBanks
GICS IndustryBanks
Earnings (Last)
Earnings (Next)
Inst Owners76.44%
Inst Owner Change0.01%
Ins Owners1.52%
Ins Owner Change-0.25%
Market Cap2.14B
Analysts81.67
Price Target50.32 (37.86%)
Short Float %0.91%
Short Ratio1.68
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.79% |
Yearly Dividend1.42
Dividend Growth(5Y)7.59%
DP41.85%
Div Incr Years4
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-7.01%
Min EPS beat(2)-17.32%
Max EPS beat(2)3.29%
EPS beat(4)2
Avg EPS beat(4)-7.31%
Min EPS beat(4)-17.32%
Max EPS beat(4)3.29%
EPS beat(8)2
Avg EPS beat(8)-5.24%
EPS beat(12)5
Avg EPS beat(12)-3.27%
EPS beat(16)8
Avg EPS beat(16)-0.78%
Revenue beat(2)1
Avg Revenue beat(2)-2.31%
Min Revenue beat(2)-8.07%
Max Revenue beat(2)3.45%
Revenue beat(4)1
Avg Revenue beat(4)-3.58%
Min Revenue beat(4)-8.07%
Max Revenue beat(4)3.45%
Revenue beat(8)1
Avg Revenue beat(8)-5.14%
Revenue beat(12)1
Avg Revenue beat(12)-4.69%
Revenue beat(16)2
Avg Revenue beat(16)-4.55%
PT rev (1m)0%
PT rev (3m)10.87%
EPS NQ rev (1m)-0.36%
EPS NQ rev (3m)6.65%
EPS NY rev (1m)0.04%
EPS NY rev (3m)9.03%
Revenue NQ rev (1m)-0.2%
Revenue NQ rev (3m)2.9%
Revenue NY rev (1m)0.06%
Revenue NY rev (3m)3.72%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.96 | ||
| Fwd PE | 8.74 | ||
| P/S | 3.3 | ||
| P/FCF | 8.03 | ||
| P/OCF | 8.03 | ||
| P/B | 0.93 | ||
| P/tB | 1.36 | ||
| EV/EBITDA | N/A |
EPS(TTM)3.33
EY9.12%
EPS(NY)4.18
Fwd EY11.44%
FCF(TTM)4.55
FCFY12.46%
OCF(TTM)4.55
OCFY12.46%
SpS11.05
BVpS39.38
TBVpS26.88
PEG (NY)0.5
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.09% | ||
| ROE | 8.66% | ||
| ROCE | N/A | ||
| ROIC | N/A | ||
| ROICexc | N/A | ||
| ROICexgc | N/A | ||
| OM | N/A | ||
| PM (TTM) | 30.85% | ||
| GM | N/A | ||
| FCFM | 41.16% |
ROA(3y)1.18%
ROA(5y)1.18%
ROE(3y)9.79%
ROE(5y)9.61%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3YN/A
OM growth 5YN/A
PM growth 3Y-7.92%
PM growth 5Y-3.62%
GM growth 3YN/A
GM growth 5YN/A
F-Score6
Asset Turnover0.04
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.15 | ||
| Debt/FCF | 1.26 | ||
| Debt/EBITDA | N/A | ||
| Cap/Depr | N/A | ||
| Cap/Sales | N/A | ||
| Interest Coverage | N/A | ||
| Cash Conversion | N/A | ||
| Profit Quality | 133.42% | ||
| Current Ratio | N/A | ||
| Quick Ratio | N/A | ||
| Altman-Z | N/A |
F-Score6
WACC17.61%
ROIC/WACCN/A
Cap/Depr(3y)N/A
Cap/Depr(5y)N/A
Cap/Sales(3y)N/A
Cap/Sales(5y)N/A
Profit Quality(3y)123.83%
Profit Quality(5y)121.91%
High Growth Momentum
Growth
EPS 1Y (TTM)-9.76%
EPS 3Y-5.26%
EPS 5Y-0.72%
EPS Q2Q%10.59%
EPS Next Y22.04%
EPS Next 2Y13.52%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)-0.66%
Revenue growth 3Y7.54%
Revenue growth 5Y7.84%
Sales Q2Q%4.31%
Revenue Next Year6.09%
Revenue Next 2Y4.99%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1YN/A
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y2.85%
FCF growth 3Y8.68%
FCF growth 5Y8.54%
OCF growth 1Y2.85%
OCF growth 3Y8.68%
OCF growth 5Y8.54%