Stock (Symbol) |
M&T Bank (MTB) |
Stock Price |
$125 |
Sector |
| Finance |
Data is as of |
| November 30, 2015 |
Expected to Report |
| Jan 18 – Jan 22 |
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. The Company conducts lending activities in various states through other subsidiaries. M&T Bank and certain of its subsidiaries also offer commercial mortgage loans secured by income producing properties or properties used by borrowers in a trade or business. Additional financial services are provided through other operating subsidiaries of the Company. Its segments include Business Banking, Commercial Banking, Commercial Real Estate, Discretionary Portfolio, Residential Mortgage Banking and Retail Banking. Source: Thomson Financial |
Sharek’s Take |
 M&T Bank (MTB) is not only expected to have a good year in 2016, but MTB’s stock’s also got 12% upside to my 2016 Fair Value — 30% to 2017’s. M&T 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 kinda-like Buffet management puts profits to shareholders first. The bank 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. What fueled growth is acquisitions, as the company closed around 25 in the last 25 years. In 2006 profits hit a then-record $7.37, and MTB should make only slightly more than that this year and the stock was around this price 9 years ago. But in the two-decades prior the stock was a star. From 1985 to 2005 MTB went from $2.50 to $100, yet is only around $125 now. But banks had it tough with the banking crisis then the recession. With higher rates expected next year, this could be the beginning of something good. |
One Year Chart |
 So a year ago I felt MTB would have a good 2015. But than as the year passed the company missed 4 straight qtrs of earnings estimates and then had the next qtr’s estimates fall each time. Really, my entire earnings table is filled with red (not negative profits, but when something isn’t good in my eyes). But the good news is now the stock’s got the lowest P/E I’ve seen in a while. And qtrly profit estimates look like this: +4%, +18%, +10%, +18%. Very good. |
Fair Value |
 MTB had a P/E of 16 in five of the last ten years. If the company is able to hit these earnings estimates — and the stock continue to garner a 16 P/E — then MTB could give a total return of 30% in two years. |
Bottom Line |
 Yes, this ten-year chart doesn’t look great, but before this — during 1985 to 2005 — the stock went from $2.50 to $100.
M&T Bank is a conservative investment with the potential to provide double-digit returns, in the form of dividends plus stock growth. Analysts predict an estimated long-term growth rate of 9% plus a 3% yield. With interest rates set to rise this could be the beginning of something good. MTB ranks 13th in the 30 stock Conservative Growth Portfolio. |
Power Rankings |
Growth Stock Portfolio
N/AAggressive Growth Portfolio N/AConservative Stock Portfolio 13 of 30 |
