Canadian Imperial Bank of Commerce (CM) vs. Bancolombia (CIB) Critical Survey

Canadian Imperial Bank of Commerce (NYSE: CM) and Bancolombia (NYSE:CIB) are both large-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, valuation, risk, earnings, analyst recommendations, dividends and institutional ownership.

Dividends

Canadian Imperial Bank of Commerce pays an annual dividend of $4.19 per share and has a dividend yield of 4.7%. Bancolombia pays an annual dividend of $1.46 per share and has a dividend yield of 3.1%. Canadian Imperial Bank of Commerce pays out 47.1% of its earnings in the form of a dividend. Bancolombia pays out 40.1% 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. 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.

Volatility and Risk

Canadian Imperial Bank of Commerce has a beta of 1.17, meaning that its share price is 17% more volatile than the S&P 500. Comparatively, Bancolombia has a beta of 0.53, meaning that its share price is 47% less volatile than the S&P 500.

Earnings & Valuation

This table compares Canadian Imperial Bank of Commerce and Bancolombia’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Canadian Imperial Bank of Commerce $16.73 billion 2.36 $3.59 billion $8.89 9.98
Bancolombia $5.76 billion 1.99 $784.50 million $3.64 13.08

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

Insider & Institutional Ownership

45.8% of Canadian Imperial Bank of Commerce shares are held by institutional investors. Comparatively, 11.4% of Bancolombia shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Canadian Imperial Bank of Commerce and Bancolombia’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Canadian Imperial Bank of Commerce 21.28% 17.55% 0.91%
Bancolombia 10.76% 9.54% 1.10%

Analyst Ratings

This is a breakdown of current recommendations and price targets for Canadian Imperial Bank of Commerce and Bancolombia, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Canadian Imperial Bank of Commerce 1 3 6 0 2.50
Bancolombia 1 6 0 0 1.86

Canadian Imperial Bank of Commerce currently has a consensus target price of $121.00, indicating a potential upside of 36.38%. Bancolombia has a consensus target price of $43.00, indicating a potential downside of 9.68%. Given Canadian Imperial Bank of Commerce’s stronger consensus rating and higher possible upside, research analysts clearly believe Canadian Imperial Bank of Commerce is more favorable than Bancolombia.

Summary

Canadian Imperial Bank of Commerce beats Bancolombia on 13 of the 16 factors compared between the two stocks.

About Canadian Imperial Bank of Commerce

Canadian Imperial Bank of Commerce, a diversified financial institution, provides various financial products and services to individual, small business, commercial, corporate, and institutional clients in Canada, the United States, and internationally. The company operates through four strategic business units: Canadian Personal and Small Business Banking; Canadian Commercial Banking and Wealth Management; U.S. Commercial Banking and Wealth Management; and Capital Markets. It offers chequing, savings, tax free savings, and business accounts; loans, lines of credit, student lines of credit, and business and agriculture loans; fixed and variable rate, first time home buyer, and commercial mortgages; rapid and franchise financing services; and home power plan solutions. The company also provides prepaid, credit, and commercial cards; and guaranteed investment certificates, investment banking, mutual funds, structured notes, education RESPs, and disability RDSPs, as well as portfolio, business, and investment solutions. In addition, it offers government supported programs; travel and creditor insurance products; specialty services, such as established business, agriculture, and indigenous banking services, as well as banking services for professionals; and custody, corporate trust, and transfer agency services. Further, the company provides student, youth, senior, newcomers, and foreign workers banking offers, as well as banking bundles. Additionally, it offers overdraft protection, switch kit, retirement planning, precious metal purchasing, cash management, merchant, trade finance, correspondent banking, community commitment, asset management, self-directed brokerage, and online foreign exchange services, as well as mobile, online, and ATM services. The company also operates an advice center. Canadian Imperial Bank of Commerce was founded in 1867 and is headquartered in Toronto, Canada.

About Bancolombia

Bancolombia S.A. provides various banking products and services to individual, corporate, and government customers throughout Colombia, Latin America, and the Caribbean region. The company operates through nine segments: Banking Colombia, Banking Panama, Banking El Salvador, Banking Guatemala, Trust, Investment Banking, Brokerage, Off Shore, and All Other. It offers checking and savings accounts, fixed term deposits, and investment products; trade financing, loans funded by domestic development banks, working capital loans, credit cards, personal and vehicle loans, payroll loans, overdrafts, and financing for industrial projects; mortgage banking and factoring services; and financial and operating leasing services. The company also provides capital market products, such as futures, forwards, options, and swaps; and brokerage, investment advisory, and private banking services, including selling and distributing equities, futures, foreign currencies, fixed income securities, mutual funds, and structured products. In addition, it offers cash management services; foreign currency transaction services; and bancassurance and insurance services. Further, the company provides investment banking services, such as corporate and project financial advisory, underwriting services, capital market services, and private equity management services; and trust and asset management services, such as money market accounts, mutual and pension funds, private equity funds, payment trust, custody services, and corporate trust. Additionally, it offers loan management, transportation, car rental, advertising and marketing, and real estate brokerage services; and is involved in outsourcing activities. As of December 31, 2016, the company had 1,274 branches. It also operates 5,418 automatic teller machines; and 226 kiosks. Bancolombia S.A. was founded in 1945 and is headquartered in Medellín, Colombia.

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