First Citizens BancShares (NASDAQ: FCNCA) and Canadian Imperial Bank of Commerce (NYSE:CM) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, valuation, profitability, institutional ownership, analyst recommendations, risk and dividends.
Volatility and Risk
First Citizens BancShares has a beta of 1.11, indicating that its stock price is 11% more volatile than the S&P 500. Comparatively, Canadian Imperial Bank of Commerce has a beta of 1.15, indicating that its stock price is 15% more volatile than the S&P 500.
First Citizens BancShares pays an annual dividend of $1.40 per share and has a dividend yield of 0.3%. Canadian Imperial Bank of Commerce pays an annual dividend of $4.19 per share and has a dividend yield of 4.8%. Canadian Imperial Bank of Commerce pays out 47.1% of its earnings in the form of a dividend. Canadian Imperial Bank of Commerce has raised its dividend for 2 consecutive years. Canadian Imperial Bank of Commerce is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Earnings & Valuation
This table compares First Citizens BancShares and Canadian Imperial Bank of Commerce’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|First Citizens BancShares||$1.61 billion||3.03||$323.75 million||N/A||N/A|
|Canadian Imperial Bank of Commerce||$16.73 billion||2.32||$3.59 billion||$8.89||9.82|
Canadian Imperial Bank of Commerce has higher revenue and earnings than First Citizens BancShares.
This is a breakdown of recent recommendations and price targets for First Citizens BancShares and Canadian Imperial Bank of Commerce, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|First Citizens BancShares||0||0||0||0||N/A|
|Canadian Imperial Bank of Commerce||1||2||4||0||2.43|
Canadian Imperial Bank of Commerce has a consensus target price of $117.17, indicating a potential upside of 34.17%. Given Canadian Imperial Bank of Commerce’s higher probable upside, analysts plainly believe Canadian Imperial Bank of Commerce is more favorable than First Citizens BancShares.
Insider and Institutional Ownership
45.7% of First Citizens BancShares shares are owned by institutional investors. Comparatively, 46.6% of Canadian Imperial Bank of Commerce shares are owned by institutional investors. 19.2% of First Citizens BancShares shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
This table compares First Citizens BancShares and Canadian Imperial Bank of Commerce’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|First Citizens BancShares||20.11%||10.77%||1.01%|
|Canadian Imperial Bank of Commerce||21.38%||17.57%||0.88%|
Canadian Imperial Bank of Commerce beats First Citizens BancShares on 10 of the 15 factors compared between the two stocks.
About First Citizens BancShares
First Citizens BancShares, Inc. (BancShares) is a holding company of First-Citizens Bank & Trust Company (FCB). As of December 31, 2016, BancShares operated in 21 states providing a range of financial services to individuals, businesses and professionals. FCB offers a range of retail and commercial banking services. Its loan services include various types of commercial, business and consumer lending. Its deposit services include checking, savings, money market and time deposit accounts. FCB also provides mortgage lending, a full-service trust department, wealth management services for businesses and individuals and other activities incidental to commercial banking. FCB’s subsidiaries, First Citizens Investor Services, Inc. and First Citizens Asset Management, Inc., provide various investment products, including annuities, discount brokerage services and third-party mutual funds to customers primarily through the bank’s branch network, as well as investment advisory services.
About Canadian Imperial Bank of Commerce
Canadian Imperial Bank of Commerce operates as a global financial institution, which provides a full range of financial products and services to individual, small business, commercial, corporate and institutional clients. It operates through the following segments: Canadian Personal and Business Banking; Canadian Commercial Banking and Wealth Management; U.S. Commercial Banking and Wealth Management; Capital Markets; and Corporate and Other. The Canadian Personal and Small Business Banking segment provides personal and small business clients across Canada with financial advice. The Canadian Commercial Banking and Wealth Management segment offers relationship-oriented commercial and private banking, as well as wealth management services to meet the needs of middle-market companies, entrepreneurs, high-net-worth individuals and families, along with institutional clients across Canada. The U.S. Commercial Banking and Wealth Management segment gives relationship-oriented commercial, personal and small business banking, as well as wealth management services to meet the needs of middle-market companies, executives, entrepreneurs, high-net-worth individuals and families in the markets it serve in the U.S. The Capital Markets segment manages integrated global markets products and services, investment banking advisory and execution, corporate banking and top-ranked research to corporate, government and institutional clients around the world. The Corporate and Other includes the following functional groups- Administration, Client Connectivity and Innovation, Finance, Human Resources and Communications, Internal Audit, Risk Management, and Technology and Operations, as well as other support groups. The company was founded on June 1, 1961 and is headquartered in Toronto, Canada.
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