The Razor's Edge

2-Year Price History

Ockham's Rating

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MTB Revenue

For a long time, value investors have used the current share price relative to sales per share levels as an important valuation tool. We utilize a historical weighted average methodology that treats recent years more importantly in the calculation. When looking at MTB through this framework, we can see that our weighted average historical high and low Price to Sales per share ratios over the last 10 years are 3.48x and 2.42x respectively.

Utilizing this range we can see that MTB’s current Price to Sales per share ratio of 2.16x is significantly below its average levels historically. In fact, with a current price of $64.25, MTB is a full 27% below its average Price to Sales ratio at comparable sales levels. This is a rare occurrence and, when taken in context of the other areas of our analysis, can be a strong positive for our outlook for MTB.

MTB Cash Earnings

Cash Earnings is always one of the most important factors to review for a company and, more importantly, an investment in a stock. MTB is significantly below their historical average multiples of Cash Earnings, as calculated by our proprietary analysis. It is incredibly important to understand that for MTB, the current level of Cash Earnings compared to its historical levels helps identify where MTB is in relation to what the investing community was willing to pay for this level of Cash Earnings in the past. With a historical high Cash Earnings per share ratio of 18.46 and a historical low Cash Earnings per share ratio of 12.74, an investor can relate where value becomes optimal.

So what does "significantly below" mean when we talk about Price to Cash Earnings numbers for MTB? From the Ockham perspective, we are looking specifically at MTB to see if the market is recognizing the huge disparity between MTB's past stock price to Cash Earnings ratio to today's levels. At a difference of 34% below the average historical Price to Cash Earnings ratio, our view would be quite positive at this point. However, as with all metrics, we need to also take other factors into account when looking at MTB. While we view better Cash Earnings metrics as very important, if the market is slow to identify this value, or if Cash Earnings were to fall from these levels, we would become more neutral in our stance.

MTB Dividends

When determining a company's future prospects for success, Ockham Research sees analysis of dividend payments as a key additional factor. Even though it isn't imperative for MTB to shell out a dividend in order to receive a positive rating, it can be helpful to further our analysis.

The estimated annual dividend for MTB is $2.80 producing a current dividend yield of 4.36%. Much like our evaluation of Sales and Cash Earnings per share, we review dividend yields from MTB against the historic high and low levels over all available dividend history. Because dividends are a decision made exclusively by management, we view a healthy and rising dividend as a sign of confidence and strength. The highest dividend yield from MTB over previous years was 5.36% while the lowest dividend yield was 0.92%. If you are looking for some “bang for your buck” then a dividend yield of 38.85% above the historically median should be enticing. MTB receives a positive boost in our view because as you know, equity at its core is simply a claim on future dividends.