First Merchants Stock Return On Equity

FRMEP Stock

USD 25.53 0.18 0.71%

First Merchants fundamentals help investors to digest information that contributes to First Merchants' financial success or failures. It also enables traders to predict the movement of First Stock. The fundamental analysis module provides a way to measure First Merchants' intrinsic value by examining its available economic and financial indicators, including the cash flow records, the balance sheet account changes, the income statement patterns, and various microeconomic indicators and financial ratios related to First Merchants stock.

		Last Reported	Projected for Next Year
	Return On Equity	0.10	0.10

As of 11/25/2024, Return On Equity is likely to grow to 0.10.

This module does not cover all equities due to inconsistencies in global equity categorizations. Continue to Equity Screeners to view more equity screening tools.

First Merchants Company Return On Equity Analysis

First Merchants' Return on Equity or ROE tells company stockholders how effectually their money is being utilized or reinvested. It is a useful ratio when analyzing company profitability or the management effectiveness given the capital invested by the shareholders. ROE shows how efficiently a company utilizes investments to generate income.

Return On Equity

Net Income

Total Equity

More About Return On Equity | All Equity Analysis

Current First Merchants Return On Equity

0.0817

Most of First Merchants' fundamental indicators, such as Return On Equity, are part of a valuation analysis module that helps investors searching for stocks that are currently trading at higher or lower prices than their real value. If the real value is higher than the market price, First Merchants is considered to be undervalued, and we provide a buy recommendation. Otherwise, we render a sell signal.

First Return On Equity Driver Correlations

Understanding the fundamental principles of building solid financial models for First Merchants is extremely important. It helps to project a fair market value of First Stock properly, considering its historical fundamentals such as Return On Equity. Since First Merchants' main accounts across its financial reports are all linked and dependent on each other, it is essential to analyze all possible correlations between related accounts. However, instead of reviewing all of First Merchants' historical financial statements, investors can examine the correlated drivers to determine its overall health. This can be effectively done using a conventional correlation matrix of First Merchants' interrelated accounts and indicators.

	Total Assets	Total Stockholder Equity	Net Debt	Retained Earnings	Net Receivables	Total Liab	Total Current Assets	Short Term Debt	Accounts Payable	Common Stock	Good Will	Short Term Investments	Intangible Assets	Current Deferred Revenue	Net Tangible Assets	Long Term Debt	Net Invested Capital	Long Term Investments	Capital Stock	Property Plant Equipment
Total Assets		0.99	0.28	0.99	0.97	1.0	-0.22	0.09	0.75	0.77	0.97	0.84	0.73	0.39	0.9	0.72	0.9	0.89	0.69	0.89
Total Stockholder Equity	0.99		0.24	0.98	0.94	0.99	-0.15	0.03	0.73	0.8	0.97	0.85	0.77	0.44	0.89	0.64	0.85	0.84	0.61	0.87
Net Debt	0.28	0.24		0.26	0.35	0.28	0.05	0.62	0.33	0.35	0.31	0.05	0.37	-0.37	0.0	0.65	0.34	0.08	0.63	0.21
Retained Earnings	0.99	0.98	0.26		0.98	0.99	-0.24	0.01	0.8	0.72	0.98	0.8	0.7	0.45	0.91	0.73	0.91	0.88	0.71	0.9
Net Receivables	0.97	0.94	0.35	0.98		0.97	-0.28	0.02	0.87	0.64	0.98	0.71	0.66	0.44	0.88	0.81	0.93	0.84	0.79	0.9
Total Liab	1.0	0.99	0.28	0.99	0.97		-0.23	0.09	0.75	0.76	0.97	0.83	0.73	0.38	0.9	0.73	0.9	0.89	0.7	0.89
Total Current Assets	-0.22	-0.15	0.05	-0.24	-0.28	-0.23		0.14	-0.22	0.12	-0.24	-0.29	-0.15	0.01	-0.52	-0.51	-0.56	-0.52	-0.48	-0.56
Short Term Debt	0.09	0.03	0.62	0.01	0.02	0.09	0.14		-0.23	0.33	-0.05	0.08	0.08	-0.75	-0.16	0.29	0.05	0.07	0.25	-0.1
Accounts Payable	0.75	0.73	0.33	0.8	0.87	0.75	-0.22	-0.23		0.34	0.83	0.33	0.38	0.67	0.68	0.7	0.78	0.56	0.71	0.75
Common Stock	0.77	0.8	0.35	0.72	0.64	0.76	0.12	0.33	0.34		0.69	0.81	0.77	0.1	0.62	0.47	0.59	0.6	0.47	0.64
Good Will	0.97	0.97	0.31	0.98	0.98	0.97	-0.24	-0.05	0.83	0.69		0.78	0.77	0.46	0.88	0.74	0.9	0.83	0.72	0.9
Short Term Investments	0.84	0.85	0.05	0.8	0.71	0.83	-0.29	0.08	0.33	0.81	0.78		0.81	0.16	0.85	0.48	0.72	0.87	0.45	0.79
Intangible Assets	0.73	0.77	0.37	0.7	0.66	0.73	-0.15	0.08	0.38	0.77	0.77	0.81		0.07	0.63	0.51	0.62	0.62	0.47	0.67
Current Deferred Revenue	0.39	0.44	-0.37	0.45	0.44	0.38	0.01	-0.75	0.67	0.1	0.46	0.16	0.07		0.49	0.04	0.32	0.22	0.08	0.44
Net Tangible Assets	0.9	0.89	0.0	0.91	0.88	0.9	-0.52	-0.16	0.68	0.62	0.88	0.85	0.63	0.49		0.67	0.92	0.94	0.66	0.96
Long Term Debt	0.72	0.64	0.65	0.73	0.81	0.73	-0.51	0.29	0.7	0.47	0.74	0.48	0.51	0.04	0.67		0.9	0.7	0.99	0.79
Net Invested Capital	0.9	0.85	0.34	0.91	0.93	0.9	-0.56	0.05	0.78	0.59	0.9	0.72	0.62	0.32	0.92	0.9		0.9	0.89	0.96
Long Term Investments	0.89	0.84	0.08	0.88	0.84	0.89	-0.52	0.07	0.56	0.6	0.83	0.87	0.62	0.22	0.94	0.7	0.9		0.67	0.88
Capital Stock	0.69	0.61	0.63	0.71	0.79	0.7	-0.48	0.25	0.71	0.47	0.72	0.45	0.47	0.08	0.66	0.99	0.89	0.67		0.78
Property Plant Equipment	0.89	0.87	0.21	0.9	0.9	0.89	-0.56	-0.1	0.75	0.64	0.9	0.79	0.67	0.44	0.96	0.79	0.96	0.88	0.78

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First Return On Equity Historical Pattern

Today, most investors in First Merchants Stock are looking for potential investment opportunities by analyzing not only static indicators but also various First Merchants' growth ratios. Consistent increases or drops in fundamental ratios usually indicate a possible pattern that can be successfully translated into profits. However, when comparing two companies, knowing each company's return on equity growth rates may not be enough to decide which company is a better investment. That's why investors frequently use a static breakdown of First Merchants return on equity as a starting point in their analysis.

First Merchants Return On Equity

Timeline

For most industries, Return on Equity between 10% and 30% are considered desirable to provide dividends to owners and have funds for the future growth of the company. Investors should be very careful using ROE as the only efficiency indicator because ROE can be high if a company is heavily leveraged.

Competition

Predict First Merchants

Return On Equity Over Time

First Total Stockholder Equity

Total Stockholder Equity

2.36 Billion

At this time, First Merchants' Total Stockholder Equity is relatively stable compared to the past year.

Based on the latest financial disclosure, First Merchants has a Return On Equity of 0.0817. This is 94.37% lower than that of the Banks sector and significantly higher than that of the Financials industry. The return on equity for all United States stocks is 126.35% lower than that of the firm.

First Return On Equity Peer Comparison

Stock peer comparison is one of the most widely used and accepted methods of equity analyses. It analyses First Merchants' direct or indirect competition against its Return On Equity to detect undervalued stocks with similar characteristics or determine the stocks which would be a good addition to a portfolio. Peer analysis of First Merchants could also be used in its relative valuation, which is a method of valuing First Merchants by comparing valuation metrics of similar companies.

First Merchants is currently under evaluation in return on equity category among its peers.

First Merchants Current Valuation Drivers

We derive many important indicators used in calculating different scores of First Merchants from analyzing First Merchants' financial statements. These drivers represent accounts that assess First Merchants' ability to generate profits relative to its revenue, operating costs, and shareholders' equity. Below are some of First Merchants' important valuation drivers and their relationship over time.

	2019	2020	2021	2022	2023	2024 (projected)
Market Cap	2.1B	2.0B	2.3B	2.4B	2.2B	2.3B
Enterprise Value	2.3B	1.9B	2.1B	3.1B	3.0B	3.1B

First Merchants ESG Sustainability

Some studies have found that companies with high sustainability scores are getting higher valuations than competitors with lower social-engagement activities. While most ESG disclosures are voluntary and do not directly affect the long term financial condition, First Merchants' sustainability indicators can be used to identify proper investment strategies using environmental, social, and governance scores that are crucial to First Merchants' managers, analysts, and investors.

Environmental

Governance

Social

First Fundamentals

	Return On Equity	0.0817
	Return On Asset	0.0099
	Profit Margin	0.30 %
	Operating Margin	0.42 %
	Current Valuation	2.16 B
	Shares Owned By Institutions	100.00 %
	Number Of Shares Shorted	589
	Price To Earning	6.62 X
	Revenue	654.31 M
	Gross Profit	611.39 M
	EBITDA	270.94 M
	Net Income	223.79 M
	Cash And Equivalents	299.12 M
	Cash Per Share	5.06 X
	Total Debt	871.5 M
	Book Value Per Share	39.18 X
	Cash Flow From Operations	258.83 M
	Short Ratio	2.00 X
	Earnings Per Share	3.81 X
	Number Of Employees	2.16 K
	Beta	1.02
	Total Asset	18.41 B
	Retained Earnings	1.15 B
	Annual Yield	0.07 %
	Net Asset	18.41 B
	Last Dividend Paid	1.38

About First Merchants Fundamental Analysis

The Macroaxis Fundamental Analysis modules help investors analyze First Merchants's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of First Merchants using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of First Merchants based on its fundamental data. In general, a quantitative approach, as applied to this company, focuses on analyzing financial statements comparatively, whereas a qaualitative method uses data that is important to a company's growth but cannot be measured and presented in a numerical way.

Please read more on our fundamental analysis page.

Pair Trading with First Merchants

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if First Merchants position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in First Merchants will appreciate offsetting losses from the drop in the long position's value.

Moving together with First Stock

0.65	AX	Axos Financial	Pair Corr
0.66	BY	Byline Bancorp Fiscal Year End 23rd of January 2025	Pair Corr
0.71	PB	Prosperity Bancshares Fiscal Year End 22nd of January 2025	Pair Corr

Moving against First Stock

0.73	WF	Woori Financial Group	Pair Corr
0.44	TFC-PO	Truist Financial	Pair Corr
0.37	TFC-PR	Truist Financial	Pair Corr
0.31	CFG-PE	Citizens Financial	Pair Corr

The ability to find closely correlated positions to First Merchants could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace First Merchants when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back First Merchants - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling First Merchants to buy it.

The correlation of First Merchants is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as First Merchants moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if First Merchants moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.

Correlation analysis and pair trading evaluation for First Merchants can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.

Pair Correlation Correlation Matching

Additional Tools for First Stock Analysis

When running First Merchants' price analysis, check to measure First Merchants' market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy First Merchants is operating at the current time. Most of First Merchants' value examination focuses on studying past and present price action to predict the probability of First Merchants' future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move First Merchants' price. Additionally, you may evaluate how the addition of First Merchants to your portfolios can decrease your overall portfolio volatility.

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