Head-To-Head Contrast: First Merchants (FRME) vs. Its Competitors

First Merchants (NASDAQ:FRME) is one of 919 publicly-traded companies in the “Banks” industry, but how does it weigh in compared to its competitors? We will compare First Merchants to related companies based on the strength of its analyst recommendations, institutional ownership, dividends, risk, profitability, valuation and earnings.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
First Merchants	17.56%	9.11%	1.15%
First Merchants Competitors	15.64%	9.43%	0.93%

Analyst Recommendations

This is a summary of recent ratings and target prices for First Merchants and its competitors, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Merchants	0	2	3	0	2.60
First Merchants Competitors	7490	30240	27840	1484	2.35

First Merchants currently has a consensus target price of $46.00, indicating a potential upside of 11.65%. As a group, “Banks” companies have a potential upside of 14.72%. Given First Merchants’ competitors higher possible upside, analysts clearly believe First Merchants has less favorable growth aspects than its competitors.

Insider and Institutional Ownership

73.9% of First Merchants shares are owned by institutional investors. Comparatively, 47.8% of shares of all “Banks” companies are owned by institutional investors. 1.8% of First Merchants shares are owned by insiders. Comparatively, 9.7% of shares of all “Banks” companies are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Dividends

First Merchants pays an annual dividend of $1.48 per share and has a dividend yield of 3.6%. First Merchants pays out 45.8% of its earnings in the form of a dividend. As a group, “Banks” companies pay a dividend yield of 8.9% and pay out 28.9% of their earnings in the form of a dividend. First Merchants has increased its dividend for 13 consecutive years. First Merchants lags its competitors as a dividend stock, given its lower dividend yield and higher payout ratio.

Earnings and Valuation

This table compares First Merchants and its competitors top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
First Merchants	$1.05 billion	$226.00 million	12.76
First Merchants Competitors	$9.95 billion	$2.42 billion	21.32

First Merchants’ competitors have higher revenue and earnings than First Merchants. First Merchants 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.

Volatility and Risk

First Merchants has a beta of 0.9, indicating that its share price is 10% less volatile than the S&P 500. Comparatively, First Merchants’ competitors have a beta of 0.61, indicating that their average share price is 39% less volatile than the S&P 500.

Summary

First Merchants competitors beat First Merchants on 9 of the 15 factors compared.

About First Merchants

First Merchants Corporation is a financial holding company headquartered in Muncie, Indiana. Its banking roots date to 1893, and its principal subsidiary, First Merchants Bank, provides banking and financial services to individuals, businesses and organizations. The company offers deposit accounts, consumer and commercial loans, mortgage services, and cash and treasury management. It also provides wealth management and trust services, along with insurance offerings. First Merchants serves customers across Indiana, Michigan and Ohio through its banking network and digital services.