Does M&T Bank Corporation’s (MTB) Past Performance Indicate A Stronger Future?
For long term investors, improvement in profitability and outperformance against the industry can be important characteristics in a stock. In this article, I will take a look at M&T Bank Corporation’s (NYSE:MTB) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers. See our latest analysis for MTB
How Did MTB’s Recent Performance Stack Up Against Its Past?
For the purpose of this commentary, I like to use the ‘latest twelve-month’ data, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This allows me to examine different stocks on a more comparable basis, using the latest information. For M&T Bank, the latest earnings is $1,333M, which compared to the prior year’s figure, has climbed up by 14.53%. Since these values may be fairly nearsighted, I have estimated an annualized five-year value for MTB’s net income, which stands at $991M. This means that, on average, M&T Bank has been able to consistently raise its bottom line over the past few years as well.
What’s enabled this growth? Well, let’s take a look at whether it is merely a result of industry tailwinds, or if M&T Bank has seen some company-specific growth. In the past few years, M&T Bank grew its bottom line faster than revenue by effectively controlling its costs. This resulted in a margin expansion and profitability over time. Viewing growth from a sector-level, the US banks industry has been growing its average earnings by double-digit 12.54% in the prior year, and a more subdued 9.71% over the past five years. This means that whatever uplift the industry is benefiting from, M&T Bank is able to leverage this to its advantage.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as M&T Bank gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research M&T Bank to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for MTB’s future growth? Take a look at our free research report of analyst consensus for MTB’s outlook.
2. Financial Health: Is MTB’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
