5 Reasons to Invest in Mid Penn Bancorp (MPB) Stock Right Now
Mid Penn Bancorp, Inc. MPB is expected to witness top-line growth, supported by the rise in loan demand and higher interest rates. The company’s efficient capital deployment activities reflect a strong liquidity and balance sheet position. Hence, it seems to be a wise idea to add the stock to your portfolio now.
Analysts seem to be optimistic regarding the company’s earnings growth prospects. In the past 60 days, the Zacks Consensus Estimate for MPB’s current-year earnings has moved 7.7% upward. The company currently sports a Zacks Rank #1 (Strong Buy).
Looking at its price performance, over the past six months, shares of Mid Penn Bancorp have gained 16.3% against the industry’s 2.5% fall.
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Here are some other factors that make MPB a viable investment option right now:
Earnings Strength: Over the past three to five years, Mid Penn Bancorp recorded earnings growth of 15.6%, higher than the industry average of 13.2%. While the company’s earnings are projected to decline 2.3% in 2022, the trend will reverse after that. In 2023, earnings are expected to grow 16.3%.
MPB has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters.
Revenue Growth: Mid Penn Bancorp’s revenues witnessed a compound annual growth rate (CAGR) of 31.7% over the last five years (2017-2021). The uptrend continued in the first nine months of 2022. MPB’s top-line improvement is mainly backed by the acquisitions completed during this period. For 2022 and 2023, the company’s revenues are projected to grow 31.8% and 11.6%, respectively.
Steady Capital Deployment Activities: Mid Penn Bancorp’s ability to generate positive cash flows, and enhance shareholder value through regular dividend payments and share repurchases is commendable. In March 2020, the bank authorized a share repurchase plan worth $15 million, which is set to expire on Mar 19, 2023.
As of Sep 30, 2022, $10.1 million worth of shares were available for repurchase. In addition to share repurchases, the company pays regular quarterly dividends. The last dividend of 20 cents per share was paid out on Nov 28, 2022. Given a strong balance sheet, MPB’s capital deployment actions look sustainable.
Strong Leverage: Currently, Mid Penn Bancorp has a debt/equity ratio of 0.14. This compares favorably with the industry average of 0.23. Given the relatively low debt/equity ratio than its peers, the company is expected to be financially stable, even in adverse economic conditions.
Favorable Valuation: The Mid Penn Bancorp stock looks undervalued right now when compared with its peers. It currently has a price/book ratio of 0.99, lower than the industry average of 1.16. Also, the company’s price/earnings (F1) ratio of 9.25 is below the industry’s 9.71.
Other Stocks Worth Considering
A couple of other top-ranked stocks from the finance space are Amerant Bancorp Inc. AMTB and CF Bankshares Inc. CFBK. At present, AMTB and CFBK also sport a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Amerant Bancorp’s 2022 earnings has moved 4.3% upward over the past 60 days. Over the past three months, AMTB’s shares have gained 6%.
The Zacks Consensus Estimate for CF Bankshares’ 2022 earnings has been revised 1% upward in the past 60 days. CFBK’s shares have rallied 3.1% in the past three months.
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CF Bankshares Inc. (CFBK) : Free Stock Analysis Report
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