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MVB Financial (MVBF) Ups Dividend by 20%: Is It Worth a Look?

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MVB Financial Corp. (MVBF - Free Report) has again raised its quarterly cash dividend. The company announced a dividend of 12 cents per share, marking a hike of 20% from the prior payout. The dividend will be paid out on Jun 15 to shareholders of record as on Jun 1.

Prior to this, MVB Financial had raised dividend in February by 11.1% to 10 cents per share. Notably, since 2017, the bank has been increasing its dividend annually. This reflects its commitment to return value to shareholders, along with its robust cash-generation competencies.

Considering the last day’s closing price of $41.77 per share, the dividend yield is currently valued at 1.92%.

MVB Financial president and CEO, Larry Mazza, said, “MVB’s first quarter growth in loans and deposits sets us apart from the pack. We are pleased to be in the position to increase our dividend and allow shareholders to share in our growth.”

Over the past three months, shares of MVB Financial have jumped 32.6%, significantly outperforming the industry’s rise of 3.2%.


 

Investors interested in this Zacks Rank #3 (Hold) stock can have a look at the bank’s fundamentals and growth prospects before taking any decision. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Revenue: MVB Financial’s revenues witnessed a five-year compounded annual growth rate (CAGR) of 16.8% (ended 2020) on the back of solid fee income growth and decent loan balance. Though the company’s sales are expected to decline 26.7% this year, the same is projected to grow at the rate of 7.2% for 2022.

Earnings: Over the past three-five years, MVB Financial’s earnings grew at a rate of 64.1%, substantially higher than the industry average of 8.5%. The company’s earnings are expected to fall 26.5% for 2021, while it will likely be in line the next year.

Also, the company has an impressive earnings surprise history. Its earnings have surpassed the Zacks Consensus Estimate in three of the trailing four quarters, with the average beat being 225.16%.

Return on Equity (ROE): MVB Financial’s ROE of 19.39% compared with the industry average of 9.11% highlights the company’s robust position over its peers.

Undervalued: With respect to the price-sales (P/S) ratio, MVB Financial seems undervalued. It has a P/S ratio of 2.87, which is below the industry average of 2.91. Also, the stock has a Value Score of B. The Value Score condenses all valuation metrics into one actionable score, which helps investors steer clear of 'value traps' and identify stocks that are truly trading at a discount.

So, based on the above-mentioned factors, the stock looks a good investment option. However, margin pressure due to low interest rates is a major concern for the company. Further, muted lending scenario and rising operating expenses are headwinds. Thus, one must consider these factors before making any decision.

Other Banks Taking Similar Actions

Over the past couple of months, several banks have raised their quarterly dividends, including Eagle Bancorp, Inc. (EGBN - Free Report) , Bank OZK (OZK - Free Report) and Alerus Financial Corporation (ALRS - Free Report) . Eagle Bancorp announced a 13.6% raise in quarterly dividend to 25 cents per share.

Further, Bank OZK hiked its quarterly dividend by 0.9% to 28 cents per share, while Alerus Financial announced a quarterly dividend of 16 cents per share, marking an increase of 6.7% from the prior payout.

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