Mid Penn Bancorp (NASDAQ: MPB) just got a small haircut on its target price. One of the well-known analyst firms, Keefe, Bruyette & Woods, still says the stock will outperform, but they did trim their target from $35 to $34.
That may not sound like a big deal, and honestly, it’s not. The shift is just 2.86%, but it shows how closely analysts are watching this small-cap bank.
Even with that tiny downgrade, MPB is still getting love from Wall Street. The current price is around $26.70, which means analysts still see a 29% upside from here. Not bad for a regional bank that’s flying under the radar.
Now’s Time to Study MPB
Let’s talk basics. MPB is not some hot tech startup. It’s a good old-fashioned financial services company. It handles everything from mortgage loans and lines of credit to farm and local government financing.
That kind of bread-and-butter banking can be boring, but boring isn’t bad, especially when you’re looking for solid, stable dividend income.
Speaking of dividends, MPB has one coming up. To get in on it, you’d need to buy the stock before August 8. The payment will be $0.20 per share, which adds up to an annual yield of around 3% based on current prices.
That’s more than you’ll get from a savings account and still looks sustainable. The payout ratio is just 34%, which means they’re not overextending themselves to keep investors happy.
Watch Out For These Key Risks
Now, not everything is perfect. MPB’s earnings per share haven’t really grown over the past five years. Flat earnings aren’t a dealbreaker, but they’re not exciting either.
On top of that, the company has been issuing new shares, which can dilute the value for existing investors. That could make it harder for the dividend to grow long-term.
Even so, MPB has increased its dividend by over 7% annually over the past decade. That kind of consistency matters, especially if you’re playing the long game.
To Conclude
Mid Penn Bancorp might not be flashy, but it’s a strong, steady small-cap pick for anyone looking to diversify into financials.
With analysts still rating it a buy, a dividend on the way, and nearly 30% upside potential, there’s a solid case to be made here.
Keep an eye on how it handles growth in the next year, but for now, MPB looks like a stock that knows what it’s doing.
