Stock (Symbol) |
M&T Bank (MTB) |
Stock Price |
$159 |
Sector |
| Finance |
Data is as of |
| May 7, 2017 |
Expected to Report |
| Jul 18 |
Company Description |
 M&T Bank Corporation (M&T) is a bank holding company. As of December 31, 2012, M&T had two wholly owned bank subsidiaries: M&T Bank and Wilmington Trust, National Association (Wilmington Trust, N.A.). The banks collectively offer a range of retail and commercial banking, trust, wealth management and investment services to their customers. Source: Thomson Financial |
Sharek’s Take |
 M&T Bank (MTB) has soared 27% from $125 to $159 since Donald Trump got elected President as news of (1) higher interest rates and (2) lower bank red-tape have caused bank stocks to soar. Now MTB has delivered 20% and 16% profit growth the past two qtrs, and profit estimates for the bank continue to climb. The profit estimate thing is a big deal, as MTB had been lowering annual estimates for YEARS and now those estimates have turned the corner. During the last 4 qtrs 2017 estimates have traveled from $8.61 to $8.48, then $8.71 and $9.12 — with the turn coming after the election. The problem is MTB sells for 17x earnings, which is high for a regional bank. M&T Bank was founded in 1856 and has a heavily concentrated presence of more than 700 branches in the New York/Maryland surrounding area, where it is the number one small business lender. Berkshire Hathaway owns around 5% of the company and management puts profits to shareholders first. MTB has been profitable in every quarter the past 36 years and during the last 30 years a third of profits have gone to dividends, another third to repurchase shares, and the rest for retained capital. It’s the only commercial bank in the S&P 500 to weather the financial crisis without cutting its dividend or raising capital. What fueled growth is acquisitions, as the company closed around 25 in the last 25 years. MTB went from $2.50 to $100 from 1985 to 2005 then was stuck between $75 and $125 for much of the decade after than. Now the stock has jumped to $159 in less than six months. But deservedly so. Profits are expected to be good the next 4 qtrs, so I feel the stock could go higher, but at 17x earnings I feel MTB is fairly valued and I am looking to buy MTB back in the Conservative Portfolio if it corrects. For the record I gave up on this stock at a much lower level and sold put before it went on this run. 🙁 |
One Year Chart |
 MTB delivered 16% profit growth last qtr which crushed estimates for 5% growth. Wow! Sales increased 5%. Afterwards, annual estimates jumped: 2017: $8.71->$8.12, 2018: $9.82->10.07, 2019 $10.81->$10.93. Qtrly estimates rose too with estimates now showing strong growth of 12%, 18%, 22% and 9% the next 4 qtrs. The Est. LTG just rose 1% to 8% and when you figure in the 2% yield that’s a estimated total return of 10% a year. |
Fair Value |
 My Fair Value is 17x earnings, and that makes the stock fairly valued here. But estimates are increasing, so my Fair Values will likely follow suit. Note this company has had a choppy decade profitwise. |
Bottom Line |
 M&T Bank hasn’t had a good decade, but with interest rates on the rise this could mean a return to growth for this beloved bank. Personally, I feel the recent run higher is a lot to absorb, and I would like to buy back in if the stock were to correct. Still, if you own the stock I would continue to hold it. MTB is a good choice for conservative investors, and is on my radar for the Conservative Growth Portfolio. |
Power Rankings |
Growth Stock Portfolio
N/AAggressive Growth Portfolio N/AConservative Stock Portfolio N/A |
