SRCE vs MBWM

For growth investors, 1st Source Corporation (SRCE) is the stronger pick with 5.

2% revenue growth year-over-year, versus 2. 7% for Mercantile Bank Corporation (MBWM). Mercantile Bank Corporation (MBWM) offers the better valuation at 9. 6x trailing P/E (9. 5x forward), making it the more compelling value choice. Analysts rate Mercantile Bank Corporation (MBWM) a "Buy" — based on 7 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.

On trailing P/E, Mercantile Bank Corporation (MBWM) is the cheapest at 9.

6x versus 1st Source Corporation at 11. 4x. On forward P/E, Mercantile Bank Corporation is actually cheaper at 9. 5x. The PEG ratio (P/E divided by earnings growth rate) is the most growth-adjusted single valuation metric: Mercantile Bank Corporation wins at 0. 63x versus 1st Source Corporation's 0. 71x — a PEG below 1. 0 traditionally signals the market is underpricing earnings growth.

Over the past 5 years, Mercantile Bank Corporation (MBWM) delivered a total return of +78.

1%, compared to +66. 5% for 1st Source Corporation (SRCE). Over 10 years, the gap is even starker: MBWM returned +178. 2% versus SRCE's +154. 9%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.

By beta (market sensitivity over 5 years), 1st Source Corporation (SRCE) is the lower-risk stock at 0.

74β versus Mercantile Bank Corporation's 0. 87β — meaning MBWM is approximately 18% more volatile than SRCE relative to the S&P 500. On balance sheet safety, 1st Source Corporation (SRCE) carries a lower debt/equity ratio of 26% versus 114% for Mercantile Bank Corporation — giving it more financial flexibility in a downturn.

By revenue growth (latest reported year), 1st Source Corporation (SRCE) is pulling ahead at 5.

2% versus 2. 7% for Mercantile Bank Corporation (MBWM). On earnings-per-share growth, the picture is similar: 1st Source Corporation grew EPS 20. 5% year-over-year, compared to 10. 8% for Mercantile Bank Corporation. Higher growth typically commands a higher valuation multiple — check whether the premium P/E or P/S is justified by the growth rate using the PEG ratio.

1st Source Corporation (SRCE) is the more profitable company, earning 26.

4% net margin versus 23. 9% for Mercantile Bank Corporation — meaning it keeps 26. 4% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: SRCE leads at 34. 2% versus 27. 5% for MBWM. At the gross margin level — before operating expenses — SRCE leads at 70. 3%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.

The PEG ratio (forward P/E divided by expected earnings growth rate) is the most precise measure of undervaluation relative to growth potential.

By this metric, Mercantile Bank Corporation (MBWM) is the more undervalued stock at a PEG of 0. 63x versus 1st Source Corporation's 0. 71x. A PEG below 1. 0 is traditionally considered the threshold for growth-adjusted undervaluation. On forward earnings alone, Mercantile Bank Corporation (MBWM) trades at 9. 5x forward P/E versus 10. 9x for 1st Source Corporation — 1. 3x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for SRCE: 9. 7% to $81. 00.

All stocks in this comparison pay dividends.

Mercantile Bank Corporation (MBWM) offers the highest yield at 2. 8%, versus 2. 1% for 1st Source Corporation (SRCE).

For long-horizon retirement investors, 1st Source Corporation (SRCE) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β 0.

74), 2. 1% yield, +154. 9% 10Y return). Both have compounded well over 10 years (SRCE: +154. 9%, MBWM: +178. 2%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.

Both stocks operate in the Financial Services sector, making this a peer-level intra-sector comparison — the same macro tailwinds and headwinds will affect both.

These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.