Comerica (NYSE: CMA) and Valley National Bancorp (NYSE:VLY) are both mid-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, earnings, valuation, institutional ownership, profitability, risk and analyst recommendations.
Institutional and Insider Ownership
82.5% of Comerica shares are held by institutional investors. Comparatively, 62.3% of Valley National Bancorp shares are held by institutional investors. 1.1% of Comerica shares are held by insiders. Comparatively, 3.1% of Valley National Bancorp shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Volatility & Risk
Comerica has a beta of 1.51, suggesting that its stock price is 51% more volatile than the S&P 500. Comparatively, Valley National Bancorp has a beta of 0.91, suggesting that its stock price is 9% less volatile than the S&P 500.
This is a summary of recent recommendations and price targets for Comerica and Valley National Bancorp, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Valley National Bancorp||0||5||2||0||2.29|
Comerica currently has a consensus price target of $77.47, indicating a potential downside of 2.90%. Valley National Bancorp has a consensus price target of $12.60, indicating a potential upside of 7.33%. Given Valley National Bancorp’s stronger consensus rating and higher possible upside, analysts plainly believe Valley National Bancorp is more favorable than Comerica.
This table compares Comerica and Valley National Bancorp’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Valley National Bancorp||19.91%||8.27%||0.81%|
Comerica pays an annual dividend of $1.20 per share and has a dividend yield of 1.5%. Valley National Bancorp pays an annual dividend of $0.44 per share and has a dividend yield of 3.7%. Comerica pays out 27.1% of its earnings in the form of a dividend. Valley National Bancorp pays out 64.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Valley National Bancorp has increased its dividend for 5 consecutive years. Valley National Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation & Earnings
This table compares Comerica and Valley National Bancorp’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Comerica||$2.97 billion||4.66||$767.50 million||$4.42||18.05|
|Valley National Bancorp||$708.66 million||4.37||$179.50 million||$0.68||17.26|
Comerica has higher revenue and earnings than Valley National Bancorp. Valley National Bancorp is trading at a lower price-to-earnings ratio than Comerica, indicating that it is currently the more affordable of the two stocks.
Comerica beats Valley National Bancorp on 12 of the 17 factors compared between the two stocks.
Comerica Company Profile
Comerica Incorporated is a financial services company. The Company’s principal activity is lending to and accepting deposits from businesses and individuals. The Company’s segments include the Business Bank, the Retail Bank, Wealth Management, Finance and Other. The Business Bank serves middle market businesses, multinational corporations and governmental entities by offering various products and services, including commercial loans and lines of credit, deposits, cash management, capital market products, international trade finance, letters of credit, foreign exchange management services and loan syndication services. The Retail Bank includes small business banking and personal financial services, consisting of consumer lending, consumer deposit gathering and mortgage loan origination. The Wealth Management segment offers products and services consisting of fiduciary services, private banking, retirement services, investment advisory services, investment banking and brokerage services.
Valley National Bancorp Company Profile
Valley National Bancorp is the bank holding company for Valley National Bank (the Bank). The Bank provides a range of commercial, retail, insurance and wealth management financial services products. The Company’s segments include Consumer Lending, Commercial Lending, Investment Management, and Corporate and Other Adjustments. The Consumer Lending segment primarily includes residential mortgages, home equity loans and automobile loans. The Commercial Lending segment primarily includes floating rate and adjustable rate commercial and industrial loans, as well as fixed rate owner occupied and commercial real estate loans. The Investment Management segment includes the Company’s investments in various types of securities. As of July 26, 2017, the Bank operated 200 branch locations serving northern and central New Jersey, the New York City boroughs of Manhattan, Brooklyn, Queens and Long Island, and Florida.
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