Wilshire Bancorp (NASDAQ: WIBC) and Commerce Bancshares (NASDAQ:CBSH) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitabiliy, analyst recommendations, institutional ownership, dividends, risk, earnings and valuation.

Risk & Volatility

Wilshire Bancorp has a beta of 1.51, suggesting that its share price is 51% more volatile than the S&P 500. Comparatively, Commerce Bancshares has a beta of 0.78, suggesting that its share price is 22% less volatile than the S&P 500.

Dividends

Wilshire Bancorp pays an annual dividend of $0.24 per share and has a dividend yield of 2.2%. Commerce Bancshares pays an annual dividend of $0.90 per share and has a dividend yield of 1.6%. Wilshire Bancorp pays out 32.4% of its earnings in the form of a dividend. Commerce Bancshares pays out 33.7% 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. Commerce Bancshares has increased its dividend for 48 consecutive years. Wilshire Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Wilshire Bancorp and Commerce Bancshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Wilshire Bancorp N/A N/A N/A
Commerce Bancshares 23.43% 11.76% 1.12%

Valuation and Earnings

This table compares Wilshire Bancorp and Commerce Bancshares’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Wilshire Bancorp N/A N/A N/A $0.74 14.78
Commerce Bancshares $1.13 billion 5.05 $271.75 million $2.67 21.02

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

Institutional & Insider Ownership

62.1% of Commerce Bancshares shares are owned by institutional investors. 4.3% of Commerce Bancshares shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent recommendations and price targets for Wilshire Bancorp and Commerce Bancshares, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Wilshire Bancorp 0 0 0 0 N/A
Commerce Bancshares 2 5 0 0 1.71

Commerce Bancshares has a consensus target price of $52.60, suggesting a potential downside of 6.42%. Given Commerce Bancshares’ higher possible upside, analysts clearly believe Commerce Bancshares is more favorable than Wilshire Bancorp.

Summary

Commerce Bancshares beats Wilshire Bancorp on 9 of the 12 factors compared between the two stocks.

Wilshire Bancorp Company Profile

Wilshire Bancorp, Inc. (Wilshire) is a bank holding company, which offers a range of financial products and services primarily through its subsidiary, Wilshire Bank (the Bank), a California state-chartered commercial bank. The Bank has over 35 full-service branch offices in Southern California, Texas, Alabama, Georgia, New Jersey and the greater New York City metropolitan area. It also has approximately six loan production offices (LPOs) of which over four are utilized primarily for the origination of loans under the small business administration (SBA) lending program located in California, Colorado, Georgia and Washington, and approximately two are utilized primarily for the origination of residential mortgage loans located in Southern California. The Company has approximately $3.84 billion in total loans (net of deferred fees and including loans held-for-sale) and over $3.84 billion in deposits.

Commerce Bancshares Company Profile

Commerce Bancshares, Inc. is a bank holding company of Commerce Bank (the Bank). The Bank is engaged in general banking business, providing a range of retail, mortgage banking, corporate, investment, trust and asset management products and services to individuals and businesses. The Company operates through three segments: Consumer, Commercial and Wealth. The Consumer segment includes the consumer portion of the retail branch network (loans, deposits and other personal banking services), indirect and other consumer financing, and consumer debit and credit bank cards. The Commercial segment provides corporate lending, leasing, international services, and business, government deposit, and related commercial cash management services, as well as merchant and commercial bank card products. The Wealth segment provides traditional trust and estate tax planning, advisory and discretionary investment management, and brokerage services, and includes the Private Banking product portfolio.

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