Financial Analysis: Commerce Bancshares (NASDAQ:CBSH) versus CVB Financial (NASDAQ:CVBF)

Commerce Bancshares (NASDAQ:CBSH) and CVB Financial (NASDAQ:CVBF) are both mid-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, profitability, institutional ownership, valuation, earnings, analyst recommendations and dividends.

Dividends

Commerce Bancshares pays an annual dividend of $1.10 per share and has a dividend yield of 1.7%. CVB Financial pays an annual dividend of $0.80 per share and has a dividend yield of 4.1%. Commerce Bancshares pays out 26.6% of its earnings in the form of a dividend. CVB Financial pays out 55.2% 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. Commerce Bancshares has increased its dividend for 58 consecutive years.

Profitability

This table compares Commerce Bancshares and CVB Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Commerce Bancshares	25.24%	16.31%	1.69%
CVB Financial	29.32%	9.35%	1.27%

Analyst Ratings

This is a summary of current recommendations for Commerce Bancshares and CVB Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Commerce Bancshares	0	6	0	0	2.00
CVB Financial	0	3	2	0	2.40

Commerce Bancshares currently has a consensus target price of $63.20, indicating a potential downside of 2.75%. CVB Financial has a consensus target price of $23.50, indicating a potential upside of 19.96%. Given CVB Financial’s stronger consensus rating and higher possible upside, analysts plainly believe CVB Financial is more favorable than Commerce Bancshares.

Institutional & Insider Ownership

70.3% of Commerce Bancshares shares are owned by institutional investors. Comparatively, 74.2% of CVB Financial shares are owned by institutional investors. 3.1% of Commerce Bancshares shares are owned by insiders. Comparatively, 6.1% of CVB Financial shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Commerce Bancshares and CVB Financial”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Commerce Bancshares	$1.69 billion	5.14	$526.33 million	$4.13	15.74
CVB Financial	$476.02 million	5.67	$200.72 million	$1.45	13.51

Commerce Bancshares has higher revenue and earnings than CVB Financial. CVB Financial is trading at a lower price-to-earnings ratio than Commerce Bancshares, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Commerce Bancshares has a beta of 0.6, suggesting that its stock price is 40% less volatile than the S&P 500. Comparatively, CVB Financial has a beta of 0.65, suggesting that its stock price is 35% less volatile than the S&P 500.

Summary

CVB Financial beats Commerce Bancshares on 9 of the 17 factors compared between the two stocks.

About Commerce Bancshares

Commerce Bancshares, Inc. operates as the bank holding company for Commerce Bank that provides retail, mortgage banking, corporate, investment, trust, and asset management products and services to individuals and businesses in the United States. It operates through three segments: Consumer, Commercial, and Wealth. The Consumer segment offers various banking products and services, including consumer deposits; consumer loans, such as automobile, motorcycle, marine, tractor/trailer, recreational vehicle, fixed rate and revolving home equity, and other consumer loans; patient health care financing; real estate loans; indirect and other consumer financing; retail branch network; personal mortgage banking; consumer installment lending; and consumer debit and credit bank cards. The Commercial segment provides corporate lending, leasing, international, merchant and commercial bank card, and securities safekeeping and bond accounting services; and business products, government deposits, and related commercial cash management services, as well as sells fixed income securities to correspondent banks, corporations, public institutions, municipalities, and individuals. The Wealth segment provides traditional trust and estate planning, advisory and discretionary investment portfolio management, and brokerage services, as well as private banking accounts. The company also offers private equity investment, securities brokerage, insurance agency, specialty lending, and leasing services, as well as online and mobile banking services. Commerce Bancshares, Inc. was founded in 1865 and is headquartered in Kansas City, Missouri.

About CVB Financial

CVB Financial Corp. operates as a bank holding company for Citizens Business Bank, a state-chartered bank that provides banking and financial services to small to mid-sized businesses and individuals. It offers checking, savings, money market, and time certificates of deposit products for business and personal accounts; and serves as a federal tax depository for business customers. The company also provides commercial lending products comprising lines of credit and other working capital financing, accounts receivable lending, and letters of credit; agriculture loans to finance the operating needs of wholesale dairy farm operations, cattle feeders, livestock raisers, and farmers; lease financing services for municipal governments; commercial real estate and construction loans; and consumer financing products, including automobile leasing and financing, lines of credit, credit cards, home mortgages, and home equity loans and lines of credit. In addition, it offers various specialized services, such as treasury management systems for monitoring cash flow, merchant card processing program, armored pick-up and delivery, payroll services, remote deposit capture, electronic funds transfers, wires and automated clearinghouse, and online account access. Further, the company provides trust services, such as fiduciary services, mutual funds, annuities, 401(k) plans, and individual investment accounts. CVB Financial Corp. was founded in 1974 and is headquartered in Ontario, California.