M&T Bank Corp Valuation – February 2019 $MTB

Company Profile (excerpt from Reuters): M&T Bank Corporation (M&T), incorporated on November 6, 1969, is a bank holding company. As of December 31, 2016, M&T had two bank subsidiaries: Manufacturers and Traders Trust Company (M&T Bank) and Wilmington Trust, National Association (Wilmington Trust, N.A.). The Company, along with its subsidiaries, offers a range of retail and commercial banking, trust and wealth management, and investment services. The Company’s segments are Business Banking, Commercial Banking, Commercial Real Estate, Discretionary Portfolio, Residential Mortgage Banking and Retail Banking.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of MTB – February 2019

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass all 6 of the following tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $23,018,662,800 Pass
2. Earnings Stability Positive EPS for 10 years prior Pass
3. Dividend Record Dividend Payments for 10 years prior Pass
4. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 79.83% Pass
5. Moderate PEmg Ratio PEmg < 20 14.59 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.54 Pass
Enterprising Investor; must pass all 3 of the following tests, or be suitable for the Defensive Investor.
1. Earnings Stability Positive EPS for 5 years prior Pass
2. Dividend Record Currently Pays Dividend Pass
3. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $11.24
MG Growth Estimate 7.66%
MG Value $267.86
Opinion Undervalued
MG Grade A
MG Value based on 3% Growth $163.01
MG Value based on 0% Growth $95.56
Market Implied Growth Rate 3.04%
Current Price $164.00
% of Intrinsic Value 61.23%

M&T Bank Corporation qualifies for both the Defensive Investor and the Enterprising Investor. In fact, the company meets all of the requirements of both investor types, a rare accomplishment indicative of the company’s strong financial position . The Enterprising Investor has no initial concerns. As a result, all value investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $7.44 in 2015 to an estimated $11.24 for 2019. This level of demonstrated earnings growth outpaces the market’s implied estimate of 3.04% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into M&T Bank Corporation revealed the company was trading below its Graham Number of $178.26. The company pays a dividend of $3.55 per share, for a yield of 2.2%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 14.59, which was below the industry average of 16.24, which by some methods of valuation makes it one of the most undervalued stocks in its industry.

M&T Bank Corporation fares extremely well in the ModernGraham grading system, scoring an A.

Stage 3: Information for Further Research

Graham Number $178.26
PEmg 14.59
PB Ratio 1.54
Dividend Yield 2.16%
TTM Dividend $3.55
Number of Consecutive Years of Dividend Growth 2

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 12/1/2018
Long-Term Debt & Capital Lease Obligation $8,444,914,000
Total Assets $120,097,403,000
Intangible Assets $4,640,179,000
Total Liabilities $104,637,212,000
Shares Outstanding (Diluted Average) 145,271,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $13.75
Dec2018 $12.76
Dec2017 $8.70
Dec2016 $7.78
Dec2015 $7.18
Dec2014 $7.42
Dec2013 $8.20
Dec2012 $7.54
Dec2011 $6.35
Dec2010 $5.69
Dec2009 $2.89
Dec2008 $5.01
Dec2007 $5.95
Dec2006 $7.37
Dec2005 $6.73
Dec2004 $6.00
Dec2003 $4.95
Dec2002 $4.78
Dec2001 $3.82
Dec2000 $3.44
Dec1999 $3.28

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $11.24
Dec2018 $9.58
Dec2017 $7.95
Dec2016 $7.59
Dec2015 $7.44
Dec2014 $7.39
Dec2013 $6.97
Dec2012 $6.06
Dec2011 $5.28
Dec2010 $4.95
Dec2009 $4.92
Dec2008 $6.03
Dec2007 $6.42
Dec2006 $6.43
Dec2005 $5.73
Dec2004 $5.01
Dec2003 $4.37

Recommended Reading:

Other ModernGraham posts about the company

M&T Bank Corp Valuation – April 2018 $MTB
Best Stocks to Invest In: the Bank Industry – August 2016
9 Best Stocks For Value Investors This Week – 7/23/16
M&T Bank Corp Valuation – July 2016 $MTB
5 Undervalued Companies for Enterprising Investors Near 52 Week Lows – February 2016

Other ModernGraham posts about related companies

Bank of America Corp Valuation – January 2019 $BAC
Fifth Third Bancorp Valuation – January 2019 $FITB
Zions Bancorp Valuation – January 2019 $ZION
Regions Financial Corp Valuation – January 2019 $RF
Huntington Bancshares Inc Valuation – January 2019 $HBAN
PNC Financial Services Group Inc Valuation – January 2019 $PNC
KeyCorp Valuation – January 2019 $KEY
Citigroup Inc Valuation – January 2019 $C
People’s United Financial Inc Valuation – January 2019 $PBCT
JPMorgan Chase & Co Valuation – November 2018 $JPM

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

M&T Bank Corp Valuation – April 2018 $MTB

Company Profile (excerpt from Reuters): M&T Bank Corporation (M&T), incorporated on November 6, 1969, is a bank holding company. As of December 31, 2016, M&T had two bank subsidiaries: Manufacturers and Traders Trust Company (M&T Bank) and Wilmington Trust, National Association (Wilmington Trust, N.A.). The Company, along with its subsidiaries, offers a range of retail and commercial banking, trust and wealth management, and investment services. The Company’s segments are Business Banking, Commercial Banking, Commercial Real Estate, Discretionary Portfolio, Residential Mortgage Banking and Retail Banking.

MTB Chart

MTB data by YCharts

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of MTB – April 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass all 6 of the following tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $27,015,319,211 Pass
2. Earnings Stability Positive EPS for 10 years prior Pass
3. Dividend Record Dividend Payments for 10 years prior Pass
4. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 89.42% Pass
5. Moderate PEmg Ratio PEmg < 20 19.42 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.66 Pass
Enterprising Investor; must pass all 3 of the following tests, or be suitable for the Defensive Investor.
1. Earnings Stability Positive EPS for 5 years prior Pass
2. Dividend Record Currently Pays Dividend Pass
3. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $9.26
MG Growth Estimate 3.79%
MG Value $148.89
Opinion Overvalued
MG Grade C+
MG Value based on 3% Growth $134.29
MG Value based on 0% Growth $78.72
Market Implied Growth Rate 5.46%
Current Price $179.89
% of Intrinsic Value 120.82%

M&T Bank Corporation qualifies for both the Defensive Investor and the Enterprising Investor. In fact, the company meets all of the requirements of both investor types, a rare accomplishment indicative of the company’s strong financial position . The Enterprising Investor has no initial concerns. As a result, all value investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Overvalued after growing its EPSmg (normalized earnings) from $7.39 in 2014 to an estimated $9.26 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 5.46% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into M&T Bank Corporation revealed the company was trading above its Graham Number of $163. The company pays a dividend of $3 per share, for a yield of 1.7% Its PEmg (price over earnings per share – ModernGraham) was 19.42, which was below the industry average of 22.06, which by some methods of valuation makes it one of the most undervalued stocks in its industry.

M&T Bank Corporation receives an average overall rating in the ModernGraham grading system, scoring a C+.

Stage 3: Information for Further Research

Graham Number $163.00
PEmg 19.42
PB Ratio 1.66
Dividend Yield 1.67%
TTM Dividend $3.00
Number of Consecutive Years of Dividend Growth 1

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 12/1/2017
Long-Term Debt & Capital Lease Obligation $8,141,430,000
Total Assets $118,593,487,000
Intangible Assets $4,664,701,000
Total Liabilities $102,342,668,000
Shares Outstanding (Diluted Average) 150,325,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $11.80
Dec2017 $8.70
Dec2016 $7.78
Dec2015 $7.18
Dec2014 $7.42
Dec2013 $8.20
Dec2012 $7.54
Dec2011 $6.35
Dec2010 $5.69
Dec2009 $2.89
Dec2008 $5.01
Dec2007 $5.95
Dec2006 $7.37
Dec2005 $6.73
Dec2004 $6.00
Dec2003 $4.95
Dec2002 $4.78
Dec2001 $3.82
Dec2000 $3.44
Dec1999 $3.28
Dec1998 $2.62

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $9.26
Dec2017 $7.95
Dec2016 $7.59
Dec2015 $7.44
Dec2014 $7.39
Dec2013 $6.97
Dec2012 $6.06
Dec2011 $5.28
Dec2010 $4.95
Dec2009 $4.92
Dec2008 $6.03
Dec2007 $6.42
Dec2006 $6.43
Dec2005 $5.73
Dec2004 $5.01
Dec2003 $4.37
Dec2002 $3.91

Recommended Reading:

Other ModernGraham posts about the company

9 Best Stocks For Value Investors This Week – 7/23/16
M&T Bank Corp Valuation – July 2016 $MTB
5 Undervalued Companies for Enterprising Investors Near 52 Week Lows – February 2016
13 Best Stocks For Value Investors This Week – 12/12/15
M&T Bank Corp Valuation – December 2015 Update $MTB

Other ModernGraham posts about related companies

Bank of America Corp Valuation – March 2018 $BAC
Fifth Third Bancorp Valuation – March 2018 $FITB
Regions Financial Corp Valuation – March 2018 $RF
Huntington Bancshares Inc Valuation – March 2018 $HBAN
Zions Bancorp Valuation – March 2018 $ZION
State Street Corp Valuation – March 2018 $STT
PNC Financial Services Group Inc Valuation – March 2018 $PNC
KeyCorp Valuation – March 2018 $KEY
Canadian Western Bank Valuation – March 2018 $TSE-CWB
Simmons First National Corp Valuation – March 2018 $SFNC

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

M&T Bank Corp Valuation – July 2016 $MTB

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Companies Benjamin Graham Would Invest In Today – July 2016.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how M&T Bank Corp (MTB) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): M&T Bank Corporation (M&T) is a bank holding company. The Company, through its subsidiaries, M&T Bank and Wilmington Trust, National Association (Wilmington Trust, N.A.), offer a range of retail and commercial banking, trust and wealth management, and investment services to their customers. M&T’s segments include Business Banking, Commercial Banking, Commercial Real Estate, Discretionary Portfolio, Residential Mortgage Banking and Retail Banking. The Business Banking segment provides a range of services to small businesses and professionals. The Commercial Real Estate segment provides credit and deposit services to its customers. The Discretionary Portfolio segment includes investment and trading account securities; residential real estate loans and other assets, and Cayman Islands office deposits. The Residential Mortgage Banking segment primarily originates and services residential mortgage loans. The Retail Banking segment offers a range of retail banking services to consumers.

[level-free]

To read the details of this valuation, you must be logged in as a premium member. If you are not a premium member, please consider becoming one.

Premium members can view a full ModernGraham valuation of the company and have access to download a PDF version of the valuation for easy reference. Here is a free sample valuation pdf, and here is a post detailing what can be found within each individual company’s valuation.

[/level-free]
[not-level-free]

Downloadable PDF version of this valuation:

ModernGraham Valuation of MTB – July 2016

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass all 6 of the following tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $18,029,478,968 Pass
2. Earnings Stability Positive EPS for 10 years prior Pass
3. Dividend Record Dividend Payments for 10 years prior Pass
4. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 60.65% Pass
5. Moderate PEmg Ratio PEmg < 20 15.17 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.10 Pass
Enterprising Investor; must pass all 3 of the following tests, or be suitable for the Defensive Investor.
1. Earnings Stability Positive EPS for 5 years prior Pass
2. Dividend Record Currently Pays Dividend Pass
3. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

MTB value chart July 2016

EPSmg $7.54
MG Growth Estimate 3.66%
MG Value $119.40
Opinion Fairly Valued
MG Grade B
MG Value based on 3% Growth $109.40
MG Value based on 0% Growth $64.13
Market Implied Growth Rate 3.34%
Current Price $114.48
% of Intrinsic Value 95.88%

M&T Bank Corporation qualifies for both the Defensive Investor and the Enterprising Investor. In fact, the company meets all of the requirements of both investor types, a rare accomplishment indicative of the company’s strong financial position. The Enterprising Investor has no initial concerns. As a result, all value investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Fairly Valued after growing its EPSmg (normalized earnings) from $6.06 in 2012 to an estimated $7.54 for 2016. This level of demonstrated earnings growth supports the market’s implied estimate of 3.34% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value within a margin of safety relative to the price.

M&T Bank Corporation performs fairly well in the ModernGraham grading system, scoring a B.

Stage 3: Information for Further Research

MTB charts July 2016

Graham Number $128.44
PEmg 15.17
PB Ratio 1.10
Dividend Yield 2.45%
TTM Dividend $2.80
Number of Consecutive Years of Dividend Growth 0

[/not-level-free]

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 6/1/2016
Long-Term Debt $10,328,751,000
Total Assets $123,820,584,000
Intangible Assets $4,709,643,000
Total Liabilities $107,349,070,000
Shares Outstanding (Diluted Average) 158,341,000

Earnings Per Share History

Next Fiscal Year Estimate $7.65
Dec2015 $7.18
Dec2014 $7.42
Dec2013 $8.20
Dec2012 $7.54
Dec2011 $6.35
Dec2010 $5.69
Dec2009 $2.89
Dec2008 $5.01
Dec2007 $5.95
Dec2006 $7.37
Dec2005 $6.73
Dec2004 $6.00
Dec2003 $4.95
Dec2002 $5.07
Dec2001 $3.82
Dec2000 $3.44
Dec1999 $3.28
Dec1998 $2.62
Dec1997 $2.53
Dec1996 $2.10

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $7.54
Dec2015 $7.44
Dec2014 $7.39
Dec2013 $6.97
Dec2012 $6.06
Dec2011 $5.28
Dec2010 $4.95
Dec2009 $4.92
Dec2008 $6.03
Dec2007 $6.42
Dec2006 $6.45
Dec2005 $5.76
Dec2004 $5.07
Dec2003 $4.44
Dec2002 $4.01
Dec2001 $3.36
Dec2000 $3.02

Recommended Reading:

Other ModernGraham posts about the company

5 Undervalued Companies for Enterprising Investors Near 52 Week Lows – February 2016
13 Best Stocks For Value Investors This Week – 12/12/15
M&T Bank Corp Valuation – December 2015 Update $MTB
The Best Companies of the Banking Industry – October 2015
5 Undervalued Companies for Enterprising Investors Near 52 Week Lows – October 2015

Other ModernGraham posts about related companies

Citigroup Inc Valuation – July 2016 $C
Bank of America Corp Valuation – July 2016 $BAC
Fifth Third Bancorp Valuation – July 2016 $FITB
Zions Bancorp Valuation – June 2016 $ZION
Regions Financial Corp – June 2016 $RF
Wells Fargo & Co Valuation – June 2016 $WFC
Huntington Bancshares Inc Valuation – June 2016 $HBAN
State Street Corp Valuation – June 2016 $STT
KeyCorp Valuation – June 2016 $KEY
PNC Financial Services Group Inc Valuation – June 2016 $PNC

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

M&T Bank Corp Valuation – December 2015 Update $MTB

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Most Undervalued Companies for the Defensive Investor – November 2015.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how M&T Bank Corp (MTB) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): M&T Bank Corporation (M&T) is a bank holding company for M&T Bank and Wilmington Trust, National Association (Wilmington Trust, N.A.). The Company’s segments include Business Banking, Commercial Banking, Commercial Real Estate, Discretionary Portfolio, Residential Mortgage Banking and Retail Banking. The Business Banking segment provides deposit, lending, cash management and other financial services. The Commercial Banking segment offers credit products and banking services for middle-market and commercial customers. Its Commercial Real Estate segment provides credit and deposit services. The Discretionary Portfolio segment includes investment and trading securities, loans and other assets, and borrowed funds. The Residential Mortgage Banking segment originates and services residential mortgage loans. The Retail Banking segment offers a range of services to consumers through delivery channels. It operates over 800 retail and commercial branches, and 1,600 automated teller machines.

[level-free]

To read the details of this valuation, you must be logged in as a premium member. If you are not a premium member, please consider becoming one.

Premium members can view a full ModernGraham valuation of the company and have access to download a PDF version of the valuation for easy reference. Here is a free sample valuation pdf, and here is a post detailing what can be found within each individual company’s valuation.

[/level-free]
[not-level-free]

Downloadable PDF version of this valuation:

ModernGraham Valuation of MTB – December 2015

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass all 6 of the following tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $21,386,529,877 Pass
2. Earnings Stability Positive EPS for 10 years prior Pass
3. Dividend Record Dividend Payments for 10 years prior Pass
4. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 25.75% Fail
5. Moderate PEmg Ratio PEmg < 20 16.30 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.27 Pass
Score
Enterprising Investor; must pass all 3 of the following tests, or be suitable for the Defensive Investor.
1. Earnings Stability Positive EPS for 5 years prior Pass
2. Dividend Record Currently Pays Dividend Pass
3. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

MTB value Chart December 2015

EPSmg $7.52
MG Growth Estimate 6.39%
MG Value $160.09
Opinion Fairly Valued
MG Value based on 3% Growth $109.10
MG Value based on 0% Growth $63.95
Market Implied Growth Rate 3.90%
Current Price $122.67
% of Intrinsic Value 76.63%

M&T Bank Corp qualifies for the Enterprising Investor but not the more conservative Defensive Investor.  The Defensive Investor is concerned with the insufficient earnings growth over the last ten years.  The Enterprising Investor has no initial concerns.  As a result, all Enterprising Investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with further research.

As for a valuation, the company appears to be fairly valued after growing its EPSmg (normalized earnings) from $5.28 in 2011 to an estimated $7.52 for 2015.  This level of demonstrated earnings growth supports the market’s implied estimate of 3.9% annual earnings growth over the next 7-10 years.  As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value within a margin of safety relative to the price.

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on M&T Bank Corp (MTB)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Stage 3: Information for Further Research

MTB Charts December 2015

Graham Number $121.10
PEmg 16.30
PB Ratio 1.27
Dividend Yield 2.28%
Number of Consecutive Years of Dividend Growth 0

 

[/not-level-free]

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information Sep15
Long-Term Debt $10,174,290,000
Total Assets $97,797,060,000
Intangible Assets $3,531,504,000
Total Liabilities $84,875,130,000
Shares Outstanding (Diluted Average) 133,376,000

Earnings Per Share History

Next Fiscal Year Estimate $7.43
Dec14 $7.42
Dec13 $8.20
Dec12 $7.54
Dec11 $6.35
Dec10 $5.69
Dec09 $2.89
Dec08 $5.01
Dec07 $5.95
Dec06 $7.37
Dec05 $6.73
Dec04 $6.00
Dec03 $4.95
Dec02 $4.78
Dec01 $3.82
Dec00 $3.44
Dec99 $3.28
Dec98 $2.62
Dec97 $2.53
Dec96 $2.11
Dec95 $1.80

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $7.52
Dec14 $7.39
Dec13 $6.97
Dec12 $6.06
Dec11 $5.28
Dec10 $4.95
Dec09 $4.92
Dec08 $6.03
Dec07 $6.42
Dec06 $6.43
Dec05 $5.73
Dec04 $5.01
Dec03 $4.37
Dec02 $3.91
Dec01 $3.36
Dec00 $3.02
Dec99 $2.70

Recommended Reading:

Other ModernGraham posts about the company

The Best Companies of the Banking Industry – October 2015
5 Undervalued Companies for Enterprising Investors Near 52 Week Lows – October 2015
19 Best Stocks For Value Investors This Week – 8/29/15
M&T Bank Corporation Analysis – August 2015 Update $MTB
M&T Bank Corporation Quarterly Valuation – May 2015 $MTB

Other ModernGraham posts about related companies

KeyCorp Valuation – November 2015 Update $KEY
State Street Corp Valuation – November 2015 Update $STT
BB&T Corporation Valuation – November 2015 Update $BBT
PNC Financial Services Group Valuation – November 2015 Update $PNC
SunTrust Banks Inc. Valuation – November 2015 Update $STI
U.S. Bancorp Valuation – November 2015 Update $USB
Starwood Property Trust Inc. Valuation – October 2015 Update $STWD
The Best Companies of the Banking Industry – October 2015
Comerica Inc. Valuation – October 2015 Update $CMA
Bank of New York Mellon Corporation Analysis – October 2015 Update $BK

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

 

M&T Bank Corporation Analysis – August 2015 Update $MTB

In the wake of the great financial crisis it can sometimes be difficult for Intelligent Investors to find a solid financial company in which to invest, because they require specific achievements over the historical period.  Many investors may simply decide to throw out the worst years with the rationale that they are outliers that shouldn’t be considered when evaluating the company’s prospects, but doing so would involve speculation.

We don’t know whether the financial crisis will happen again, but we do know that if it does, we can expect to see similar results as we did before.  By continuing to require the same standards for the historical period, Intelligent Investors are able to whittle down banks to only those with the best financial position, and then they are able to determine an intrinsic value to get a sense of whether the company is a good investment.

In addition, a company must have strong financial statements to prove that it is stable enough for Intelligent Investors.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.

What follows is a specific look at how M&T Bank Corporation (MTB) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): M&T Bank Corporation (M&T) is a bank holding company for M&T Bank and Wilmington Trust, National Association (Wilmington Trust, N.A.). Its segments include Business Banking, Commercial Banking, Commercial Real Estate, Discretionary Portfolio, Residential Mortgage Banking and Retail Banking. The Business Banking segment provides deposit, lending, cash management and other financial services. The Commercial Banking segment offers credit products and banking services for middle-market and commercial customers. The Commercial Real Estate segment provides credit and deposit services. The Discretionary Portfolio segment provides investment and trading securities, loans and other assets; borrowed funds, and deposits. The Residential Mortgage Banking segment originates and services residential mortgage loans. The Retail Banking segment offers a range of services to consumers through delivery channels, such as branch offices, automated teller machines, telephone banking and Internet banking.
[level-free]

To read the rest of this valuation, you must be logged in as a premium member. If you are not a premium member, please consider becoming one.

Premium members can view a full ModernGraham valuation of the company and have access to download a PDF version of the valuation for easy reference. Here is a free sample valuation pdf, and here is a post detailing what can be found within each individual company’s valuation.

[/level-free]
[level-mg-stocks-screens-subscriber]

Downloadable PDF version of this valuation:

ModernGraham Valuation of MTB – August 2015

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass all 6 of the following tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil Pass
2. Earnings Stability Positive EPS for 10 years prior Pass
3. Dividend Record Dividend Payments for 10 years prior Pass
4. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end Fail
5. Moderate PEmg Ratio PEmg < 20 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 Pass
Score
Enterprising Investor; must pass all 3 of the following tests, or be suitable for the Defensive Investor.
1. Earnings Stability Positive EPS for 5 years prior Pass
2. Dividend Record Currently Pays Dividend Pass
3. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

EPSmg 7.43
MG Growth Estimate 6.13%
MG Value $154.37
Opinion Fairly Valued
MG Value based on 3% Growth $107.79
MG Value based on 0% Growth $63.19
Market Implied Growth Rate 3.66%
Current Price $117.63
% of Intrinsic Value 76.20%

M&T Bank Corporation qualifies for the Enterprising Investor but not the more conservative Defensive Investor.  The Defensive Investor is concerned with the insufficient earnings growth over the last ten years.  The Enterprising Investor has no initial concerns.  As a result, all Enterprising Investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with the next stage of the analysis.

As for a valuation, the company appears to be fairly valued after growing its EPSmg (normalized earnings) from $5.28 in 2011 to an estimated $7.43 for 2015.  This level of demonstrated earnings growth supports the market’s implied estimate of 3.66% annual earnings growth over the next 7-10 years.  As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value within a margin of safety relative to the price.

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on M&T Bank Corporation (MTB)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Stage 3: Information for Further Research

MTB charts August 2015

PEmg 15.79
PB Ratio 1.23
Dividend Yield 2.39%
Number of Consecutive Years of Dividend Growth 0

 

[/level-mg-stocks-screens-subscriber]

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Long-Term Debt $10,175,910,000
Total Assets $97,080,080,000
Intangible Assets $3,535,594,000
Total Liabilities $84,412,080,000
Shares Outstanding (Diluted Average) 133,116,000

Earnings Per Share History

Next Fiscal Year Estimate $7.16
Dec14 $7.42
Dec13 $8.20
Dec12 $7.54
Dec11 $6.35
Dec10 $5.69
Dec09 $2.89
Dec08 $5.01
Dec07 $5.95
Dec06 $7.37
Dec05 $6.73
Dec04 $6.00
Dec03 $4.95
Dec02 $4.78
Dec01 $3.82
Dec00 $3.44
Dec99 $3.28
Dec98 $2.62
Dec97 $2.53
Dec96 $2.11
Dec95 $1.80

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $7.43
Dec14 $7.39
Dec13 $6.97
Dec12 $6.06
Dec11 $5.28
Dec10 $4.95
Dec09 $4.92
Dec08 $6.03
Dec07 $6.42
Dec06 $6.43
Dec05 $5.73
Dec04 $5.01
Dec03 $4.37
Dec02 $3.91
Dec01 $3.36
Dec00 $3.02
Dec99 $2.70

Recommended Reading:

Other ModernGraham posts about the company

M&T Bank Corporation Quarterly Valuation – May 2015 $MTB
5 Undervalued Companies to Research with a Low Beta – May 2015
5 Undervalued Companies to Research with a Low Beta – March 2015
27 Companies in the Spotlight This Week – 2/14/15
M&T Bank Corporation Quarterly Valuation – February 2015 $MTB

Other ModernGraham posts about related companies

KeyCorp Analysis – August 2015 Update $KEY
State Street Corporation Analysis – August 2015 Update $STT
BB&T Corporation Analysis – August 2015 Update $BBT
PNC Financial Services Group Inc. Analysis – August 2015 Update $PNC
US Bancorp Analysis – August 2015 Update $USB
Comerica Incorporated Analysis – July 2015 Update $CMA
Starwood Property Trust Inc. Analysis – Initial Coverage $STWD
Fifth Third Bancorp Analysis – July 2015 Update $FITB
Huntington Bancshares Analysis – June 2015 Update $HBAN
JPMorgan Chase Analysis – June 2015 Update $JPM

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please review our detailed disclaimer.

M&T Bank Corporation Quarterly Valuation – May 2015 $MTB

MTBIn the wake of the great financial crisis it can sometimes be difficult for Intelligent Investors to find a solid financial company in which to invest, because they require specific achievements over the historical period.  Many investors may simply decide to throw out the worst years with the rationale that they are outliers that shouldn’t be considered when evaluating the company’s prospects, but doing so would involve speculation.  We don’t know whether the financial crisis will happen again, but we do know that if it does, we can expect to see similar results as we did before.  By continuing to require the same standards for the historical period, Intelligent Investors are able to whittle down banks to only those with the best financial position, and then they are able to determine an intrinsic value to get a sense of whether the company is a good investment.  In addition, a company must have strong financial statements to prove that it is stable enough for Intelligent Investors.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a specific look at how M&T Bank Corporation (MTB) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): M&T Bank Corporation (M&T) is a bank holding company. The Company has two wholly owned bank subsidiaries: M&T Bank and Wilmington Trust, National Association (Wilmington Trust, N.A.). The Company offers a range of retail and commercial banking, trust and wealth management, and investment services to its customers. The Company’s segments include Business Banking, Commercial Banking, Commercial Real Estate, Discretionary Portfolio, Residential Mortgage Banking and Retail Banking. The Business Banking segment provides a range of services to businesses within markets. The Commercial Banking segment provides a range of credit products and banking services for market and commercial customers. The Commercial Real Estate segment provides credit and deposit services to its customers. The Retail Banking segment offers services to consumers through several delivery channels which include branch offices, automated teller machines, telephone banking and Internet banking.

Defensive Investor – must pass all 6 of the following tests: Score = 5/6

  1. Adequate Size of Enterprise – market capitalization of at least $2 billion – PASS
  2. Earnings Stability – positive earnings per share for at least 10 straight years – PASS
  3. Dividend Record – has paid a dividend for at least 10 straight years – PASS
  4. Earnings Growth – earnings per share has increased by at least 1/3 over the last 10 years using 3 year averages at beginning and end of period – FAIL
  5. Moderate PEmg ratio – PEmg is less than 20 – PASS
  6. Moderate Price to Assets – PB ratio is less than 2.5 or PB x PEmg is less than 50 – PASS

Enterprising Investor – must pass all 3 of the following tests or be suitable for a defensive investor: Score = 3/3

  1. Earnings Stability – positive earnings per share for at least 5 years – PASS
  2. Dividend Record – currently pays a dividend – PASS
  3. Earnings growth – EPSmg greater than 5 years ago – PASS

Valuation Summary

Key Data:

Recent Price $123.16
MG Value $159.02
MG Opinion Fairly Valued
Value Based on 3% Growth $108.86
Value Based on 0% Growth $63.81
Market Implied Growth Rate 3.95%
PEmg 16.41
PB Ratio 1.31

Balance Sheet – March 2015

Total Debt $10,509,000,000
Total Assets $98,378,000,000
Intangible Assets $3,553,000,000
Total Liabilities $85,849,000,000
Outstanding Shares 132,800,000

Earnings Per Share

2015 (estimate) $7.38
2014 $7.42
2013 $8.20
2012 $7.54
2011 $6.35
2010 $5.69
2009 $2.89
2008 $5.01
2007 $5.95
2006 $7.37
2005 $6.73

Earnings Per Share – ModernGraham 

2015 (estimate) $7.51
2014 $7.39
2013 $6.97
2012 $6.06
2011 $5.28
2010 $4.95

Dividend History

Conclusion

M&T Bank Corporation qualifies for the Enterprising Investor but not the Defensive Investor.  The Defensive Investor is concerned by the insufficient earnings growth over the last ten years, while the company passes all of the Enterprising Investor’s requirements.  As a result, Enterprising Investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with further research into the company and comparing it to other opportunities.  As for a valuation, the company appears fairly valued after growing its EPSmg (normalized earnings) from $5.28 in 2011 to an estimated $7.51 for 2015.  This level of demonstrated growth supports the market’s implied estimate of 3.95% earnings growth and leads the ModernGraham valuation model, which is based on Benjamin Graham’s formula, to return an estimate of intrinsic value within a margin of safety relative to the market price.

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on M&T Bank Corporation (MTB)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Disclaimer:  The author did not hold a position in any of the companies listed in this article at the time of publication and had no intention of changing that position within the next 72 hours.  Logo taken from the Wikipedia; this article is not affiliated with the company in any manner.

M&T Bank Corporation Quarterly Valuation – February 2015 $MTB

MTBIn the wake of the great financial crisis it can sometimes be difficult for Intelligent Investors to find a solid financial company in which to invest, because they require specific achievements over the historical period.  Many investors may simply decide to throw out the worst years with the rationale that they are outliers that shouldn’t be considered when evaluating the company’s prospects, but doing so would involve speculation.  We don’t know whether the financial crisis will happen again, but we do know that if it does, we can expect to see similar results as we did before.  By continuing to require the same standards for the historical period, Intelligent Investors are able to whittle down banks to only those with the best financial position, and then they are able to determine an intrinsic value to get a sense of whether the company is a good investment.  In addition, a company must have strong financial statements to prove that it is stable enough for Intelligent Investors.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a specific look at how M&T Bank Corporation (MTB) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): M&T Bank Corporation (M&T) is a bank holding company. The Company has two wholly owned bank subsidiaries: M&T Bank and Wilmington Trust, National Association (Wilmington Trust, N.A.). The Company offers a range of retail and commercial banking, trust and wealth management, and investment services to its customers. The Company’s segments include Business Banking, Commercial Banking, Commercial Real Estate, Discretionary Portfolio, Residential Mortgage Banking and Retail Banking. The Business Banking segment provides a range of services to businesses within markets. The Commercial Banking segment provides a range of credit products and banking services for market and commercial customers. The Commercial Real Estate segment provides credit and deposit services to its customers. The Retail Banking segment offers services to consumers through several delivery channels which include branch offices, automated teller machines, telephone banking and Internet banking.

Defensive Investor – must pass all 6 of the following tests: Score = 5/6

  1. Adequate Size of Enterprise – market capitalization of at least $2 billion – PASS
  2. Earnings Stability – positive earnings per share for at least 10 straight years – PASS
  3. Dividend Record – has paid a dividend for at least 10 straight years – PASS
  4. Earnings Growth – earnings per share has increased by at least 1/3 over the last 10 years using 3 year averages at beginning and end of period – FAIL
  5. Moderate PEmg ratio – PEmg is less than 20 – PASS
  6. Moderate Price to Assets – PB ratio is less than 2.5 or PB x PEmg is less than 50 – PASS

Enterprising Investor – must pass all 3 of the following tests or be suitable for a defensive investor: Score = 3/3

  1. Earnings Stability – positive earnings per share for at least 5 years – PASS
  2. Dividend Record – currently pays a dividend – PASS
  3. Earnings growth – EPSmg greater than 5 years ago – PASS

Valuation Summary

Key Data:

Recent Price $121.15
MG Value $172.10
MG Opinion Undervalued
Value Based on 3% Growth $107.21
Value Based on 0% Growth $62.85
Market Implied Growth Rate 3.94%
PEmg 16.38
PB Ratio 1.30

Balance Sheet – December 2014

Total Debt $9,007,000,000
Total Assets $96,686,000,000
Intangible Assets $3,560,000,000
Total Liabilities $84,350,000,000
Outstanding Shares 132,300,000

Earnings Per Share

2014 $7.42
2013 $8.20
2012 $7.54
2011 $6.35
2010 $5.69
2009 $2.89
2008 $5.01
2007 $5.95
2006 $7.37
2005 $6.73
2004 $6.00

Earnings Per Share – ModernGraham 

2014 $7.39
2013 $6.97
2012 $6.06
2011 $5.28
2010 $4.95
2009 $4.92

Dividend History

Conclusion:

M&T Bank Corporation qualifies for the Enterprising Investor but not the Defensive Investor.  The Defensive Investor is concerned by the insufficient earnings growth over the last ten years, while the company passes all of the Enterprising Investor’s requirements.  As a result, Enterprising Investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with further research into the company and comparing it to other opportunities.  As for a valuation, the company appears undervalued after growing its EPSmg (normalized earnings) from $4.95 in 2010 to $7.39 for 2014.  This level of demonstrated growth outpaces the market’s implied estimate of 3.94% earnings growth and leads the ModernGraham valuation model, which is based on Benjamin Graham’s formula, to return an estimate of intrinsic value above the market price.

Be sure to check out previous ModernGraham valuations of M&T Bank Corporation (MTB) for greater perspective!

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on M&T Bank Corporation (MTB)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Disclaimer:  The author did not hold a position in M&T Bank Corporation (MTB) or in any of the other companies listed in this article at the time of publication and had no intention of changing that position within the next 72 hours.  Logo taken from the Wikipedia; this article is not affiliated with the company in any manner.

M&T Bank Corporation Quarterly Valuation – November 2014 $MTB

MTBIn the wake of the great financial crisis it can sometimes be difficult for Intelligent Investors to find a solid financial company in which to invest, because they require specific achievements over the historical period.  Many investors may simply decide to throw out the worst years with the rationale that they are outliers that shouldn’t be considered when evaluating the company’s prospects, but doing so would involve speculation.  We don’t know whether the financial crisis will happen again, but we do know that if it does, we can expect to see similar results as we did before.  By continuing to require the same standards for the historical period, Intelligent Investors are able to whittle down banks to only those with the best financial position, and then they are able to determine an intrinsic value to get a sense of whether the company is a good investment.  In addition, a company must have strong financial statements to prove that it is stable enough for Intelligent Investors.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a specific look at how M&T Bank Corporation (MTB) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): 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.

Defensive Investor – must pass all 6 of the following tests: Score = 5/6

  1. Adequate Size of Enterprise – market capitalization of at least $2 billion – PASS
  2. Earnings Stability – positive earnings per share for at least 10 straight years – PASS
  3. Dividend Record – has paid a dividend for at least 10 straight years – PASS
  4. Earnings Growth – earnings per share has increased by at least 1/3 over the last 10 years using 3 year averages at beginning and end of period – FAIL
  5. Moderate PEmg ratio – PEmg is less than 20 – PASS
  6. Moderate Price to Assets – PB ratio is less than 2.5 or PB x PEmg is less than 50 – PASS

Enterprising Investor – must pass all 3 of the following tests or be suitable for a defensive investor: Score = 3/3

  1. Earnings Stability – positive earnings per share for at least 5 years – PASS
  2. Dividend Record – currently pays a dividend – PASS
  3. Earnings growth – EPSmg greater than 5 years ago – PASS

Valuation Summary

Key Data:

Recent Price $122.18
MG Value $171.42
MG Opinion Undervalued
Value Based on 3% Growth $107.07
Value Based on 0% Growth $62.76
Market Implied Growth Rate 4.02%
PEmg 16.55
PB Ratio 1.32

Balance Sheet – June 2014

Total Debt $7,392,000,000
Total Assets $90,835,000,000
Intangible Assets $3,574,000,000
Total Liabilities $78,666,000,000
Outstanding Shares 131,800,000

Earnings Per Share

2014 (estimate) $7.39
2013 $8.20
2012 $7.54
2011 $6.35
2010 $5.69
2009 $2.89
2008 $5.01
2007 $5.95
2006 $7.37
2005 $6.73
2004 $6.00

Earnings Per Share – ModernGraham 

2014 (estimate) $7.38
2013 $6.97
2012 $6.06
2011 $5.28
2010 $4.95
2009 $4.92

Dividend History

Conclusion:

M&T Bank Corporation is suitable for the Enterprising Investor but not the Defensive Investor.  The Defensive Investor is concerned by the low level of growth in earnings over the last ten years while the company passes all of the Enterprising Investor’s requirements.  As a result, Enterprising Investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with further research into the company and comparing it to other opportunities.  As for a valuation, the company appears undervalued after growing its EPSmg (normalized earnings) from $4.95 in 2010 to an estimated $7.38 for 2014.  This level of demonstrated growth outpaces the market’s implied estimate of 4.02% earnings growth and leads the ModernGraham valuation model, which is based on Benjamin Graham’s formula, to return an estimate of intrinsic value above the market price.

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on M&T Bank Corporation (MTB)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Disclaimer:  The author did not hold a position in M&T Bank Corporation (MTB) or in any of the other companies listed in this article at the time of publication and had no intention of changing that position within the next 72 hours.  Logo taken from the Wikipedia; this article is not affiliated with the company in any manner.

JPMorgan Chase & Co Valuation – April 2019 #JPM

Company Profile (excerpt from Reuters): JPMorgan Chase & Co. (JPMorgan Chase), incorporated on October 28, 1968, is a financial holding company. The Company is engaged in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing and asset management. JPMorgan Chase’s activities are organized into four business segments, as well as a Corporate segment. The Company’s segments include Consumer & Community Banking, Corporate & Investment Bank, Commercial Banking, and Asset & Wealth Management. Its principal bank subsidiaries include JPMorgan Chase Bank, National Association (JPMorgan Chase Bank, N.A.), a national banking association, and Chase Bank USA, National Association (Chase Bank USA, N.A.), a national banking association that is the Company’s credit card-issuing bank. JPMorgan Chase’s principal nonbank subsidiary is J.P. Morgan Securities LLC (JPMorgan Securities), the United States investment banking firm. The bank and nonbank subsidiaries of JPMorgan Chase operate nationally, as well as through overseas branches and subsidiaries, representative offices and subsidiary foreign banks. The Company’s principal operating subsidiary in the United Kingdom is J.P. Morgan Securities plc, a subsidiary of JPMorgan Chase Bank, N.A.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of JPM – April 2019

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass all 6 of the following tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $345,203,229,629 Pass
2. Earnings Stability Positive EPS for 10 years prior Pass
3. Dividend Record Dividend Payments for 10 years prior Pass
4. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 75.51% Pass
5. Moderate PEmg Ratio PEmg < 20 13.57 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.38 Pass
Enterprising Investor; must pass all 3 of the following tests, or be suitable for the Defensive Investor.
1. Earnings Stability Positive EPS for 5 years prior Pass
2. Dividend Record Currently Pays Dividend Pass
3. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $7.76
MG Growth Estimate 7.10%
MG Value $176.18
Opinion Undervalued
MG Grade A
MG Value based on 3% Growth $112.58
MG Value based on 0% Growth $65.99
Market Implied Growth Rate 2.54%
Current Price $105.37
% of Intrinsic Value 59.81%

JPMorgan Chase & Co. qualifies for both the Defensive Investor and the Enterprising Investor. In fact, the company meets all of the requirements of both investor types, a rare accomplishment indicative of the company’s strong financial position . The Enterprising Investor has no initial concerns. As a result, all value investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $5.27 in 2015 to an estimated $7.76 for 2019. This level of demonstrated earnings growth outpaces the market’s implied estimate of 2.54% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into JPMorgan Chase & Co. revealed the company was trading below its Graham Number of $116.88. The company pays a dividend of $2.72 per share, for a yield of 2.6%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 13.57, which was below the industry average of 15.47, which by some methods of valuation makes it one of the most undervalued stocks in its industry.

JPMorgan Chase & Co. fares extremely well in the ModernGraham grading system, scoring an A.

Stage 3: Information for Further Research

Graham Number $116.88
PEmg 13.57
PB Ratio 1.38
Dividend Yield 2.58%
TTM Dividend $2.72
Number of Consecutive Years of Dividend Growth 8

 

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 12/1/2018
Long-Term Debt & Capital Lease Obligation $282,031,000,000
Total Assets $2,622,532,000,000
Intangible Assets $54,349,000,000
Total Liabilities $2,366,017,000,000
Shares Outstanding (Diluted Average) 3,347,400,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $8.63
Dec2018 $9.00
Dec2017 $6.31
Dec2016 $6.19
Dec2015 $6.00
Dec2014 $5.29
Dec2013 $4.34
Dec2012 $5.20
Dec2011 $4.48
Dec2010 $3.96
Dec2009 $2.26
Dec2008 $1.35
Dec2007 $4.38
Dec2006 $4.04
Dec2005 $2.38
Dec2004 $1.55
Dec2003 $3.24
Dec2002 $0.80
Dec2001 $0.80
Dec2000 $2.86
Dec1999 $3.69

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $7.76
Dec2018 $7.07
Dec2017 $5.95
Dec2016 $5.65
Dec2015 $5.27
Dec2014 $4.82
Dec2013 $4.41
Dec2012 $4.11
Dec2011 $3.47
Dec2010 $3.05
Dec2009 $2.69
Dec2008 $2.85
Dec2007 $3.44
Dec2006 $2.78
Dec2005 $2.01
Dec2004 $1.84
Dec2003 $2.08

Recommended Reading:

Other ModernGraham posts about the company

JPMorgan Chase & Co Valuation – November 2018 $JPM
JPMorgan Chase & Co Valuation – February 2018 $JPM
10 Best Dividend Paying Stocks for the Defensive Investor – August 2016
5 Most Undervalued Stocks in the Dow – August 2016
10 Low PE Stock Picks for the Defensive Investor – August 2016

Other ModernGraham posts about related companies

Wells Fargo & Co Valuation – April 2019 #WFC
SunTrust Banks Inc Valuation – March 2019 #STI
Comerica Inc Valuation – March 2019 #CMA
SVB Financial Group Valuation – March 2019 #SIVB
US Bancorp Valuation – March 2019 #USB
Citizens Financial Group Inc Valuation – February 2019 $CFG
BB&T Corp Valuation – February 2019 $BBT
M&T Bank Corp Valuation – February 2019 $MTB
Bank of America Corp Valuation – January 2019 $BAC
Fifth Third Bancorp Valuation – January 2019 $FITB

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Wells Fargo & Co Valuation – April 2019 #WFC

Company Profile (excerpt from Reuters): Wells Fargo & Company, incorporated on January 24, 1929, is a bank holding company. The Company is a diversified financial services company. The Company has three operating segments: Community Banking, Wholesale Banking, and Wealth and Investment Management. The Company provides retail, commercial and corporate banking services through banking locations and offices, the Internet and other distribution channels to individuals, businesses and institutions in all 50 states, the District of Columbia and in other countries. The Company provides other financial services through its subsidiaries engaged in various businesses, principally: wholesale banking, mortgage banking, consumer finance, equipment leasing, agricultural finance, commercial finance, securities brokerage and investment banking, insurance agency and brokerage services, computer and data processing services, trust services, investment advisory services, mortgage-backed securities servicing and venture capital investment. The Company has its administrative facilities at various locations, including Phoenix, Arizona; San Francisco, California; San Jose, California; Greenwood Village, Colorado; Littleton, Colorado; Rochester, Minnesota; St. Louis, Missouri; Las Vegas, Nevada; Portland, Oregon, and Austin, Texas. The Company offers approximately 13,000 automated teller machines (ATMs) and over 6,000 retail banking stores coast to coast.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of WFC – April 2019

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass all 6 of the following tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $220,466,305,698 Pass
2. Earnings Stability Positive EPS for 10 years prior Pass
3. Dividend Record Dividend Payments for 10 years prior Pass
4. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 55.90% Pass
5. Moderate PEmg Ratio PEmg < 20 11.21 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.16 Pass
Enterprising Investor; must pass all 3 of the following tests, or be suitable for the Defensive Investor.
1. Earnings Stability Positive EPS for 5 years prior Pass
2. Dividend Record Currently Pays Dividend Pass
3. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $4.33
MG Growth Estimate 1.75%
MG Value $52.06
Opinion Fairly Valued
MG Grade A-
MG Value based on 3% Growth $62.85
MG Value based on 0% Growth $36.84
Market Implied Growth Rate 1.36%
Current Price $48.61
% of Intrinsic Value 93.38%

Wells Fargo & Co qualifies for both the Defensive Investor and the Enterprising Investor. In fact, the company meets all of the requirements of both investor types, a rare accomplishment indicative of the company’s strong financial position . The Enterprising Investor has no initial concerns. As a result, all value investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Fairly Valued after growing its EPSmg (normalized earnings) from $3.88 in 2015 to an estimated $4.33 for 2019. This level of demonstrated earnings growth supports the market’s implied estimate of 1.36% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value within a margin of safety relative to the price.

At the time of valuation, further research into Wells Fargo & Co revealed the company was trading below its Graham Number of $63.18. The company pays a dividend of $1.64 per share, for a yield of 3.4%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 11.21, which was below the industry average of 15.47, which by some methods of valuation makes it one of the most undervalued stocks in its industry.

Wells Fargo & Co fares extremely well in the ModernGraham grading system, scoring an A-.

Stage 3: Information for Further Research

Graham Number $63.18
PEmg 11.21
PB Ratio 1.16
Dividend Yield 3.37%
TTM Dividend $1.64
Number of Consecutive Years of Dividend Growth 8

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 12/1/2018
Long-Term Debt & Capital Lease Obligation $229,044,000,000
Total Assets $1,895,883,000,000
Intangible Assets $43,055,000,000
Total Liabilities $1,698,817,000,000
Shares Outstanding (Diluted Average) 4,698,600,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $4.70
Dec2018 $4.28
Dec2017 $4.10
Dec2016 $3.99
Dec2015 $4.12
Dec2014 $4.10
Dec2013 $3.89
Dec2012 $3.36
Dec2011 $2.82
Dec2010 $2.21
Dec2009 $1.75
Dec2008 $0.70
Dec2007 $2.38
Dec2006 $2.47
Dec2005 $2.25
Dec2004 $2.05
Dec2003 $1.83
Dec2002 $1.58
Dec2001 $0.99
Dec2000 $1.16
Dec1999 $1.15

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $4.33
Dec2018 $4.14
Dec2017 $4.06
Dec2016 $3.99
Dec2015 $3.88
Dec2014 $3.60
Dec2013 $3.17
Dec2012 $2.59
Dec2011 $2.13
Dec2010 $1.83
Dec2009 $1.73
Dec2008 $1.80
Dec2007 $2.30
Dec2006 $2.18
Dec2005 $1.94
Dec2004 $1.69
Dec2003 $1.46

Recommended Reading:

Other ModernGraham posts about the company

Wells Fargo & Co Valuation – June 2018 $WFC
10 Undervalued Companies for the Defensive Dividend Stock Investor – June 2018
Wells Fargo & Co Valuation – August 2017 $WFC
10 Undervalued Companies for the Defensive Dividend Stock Investor – January 2017
10 Undervalued Companies for the Defensive Dividend Stock Investor – December 2016

Other ModernGraham posts about related companies

Comerica Inc Valuation – March 2019 #CMA
SVB Financial Group Valuation – March 2019 #SIVB
US Bancorp Valuation – March 2019 #USB
Citizens Financial Group Inc Valuation – February 2019 $CFG
BB&T Corp Valuation – February 2019 $BBT
M&T Bank Corp Valuation – February 2019 $MTB
Bank of America Corp Valuation – January 2019 $BAC
Fifth Third Bancorp Valuation – January 2019 $FITB
Zions Bancorp Valuation – January 2019 $ZION
Regions Financial Corp Valuation – January 2019 $RF

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Back To Top