Comparing Comerica (CMA) & U.S. Bancorp (USB)

Comerica (NYSE: CMA) and U.S. Bancorp (NYSE:USB) are both large-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitability, earnings, institutional ownership, analyst recommendations, risk, dividends and valuation.

Institutional & Insider Ownership

81.8% of Comerica shares are held by institutional investors. Comparatively, 73.4% of U.S. Bancorp shares are held by institutional investors. 0.8% of Comerica shares are held by company insiders. Comparatively, 0.4% of U.S. Bancorp shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Risk & Volatility

Comerica has a beta of 1.38, indicating that its share price is 38% more volatile than the S&P 500. Comparatively, U.S. Bancorp has a beta of 0.95, indicating that its share price is 5% less volatile than the S&P 500.

Profitability

This table compares Comerica and U.S. Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Comerica 24.37% 12.05% 1.29%
U.S. Bancorp 26.39% 14.20% 1.36%

Earnings & Valuation

This table compares Comerica and U.S. Bancorp’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Comerica $3.29 billion 4.79 $743.00 million $4.73 19.39
U.S. Bancorp $24.00 billion 3.51 $6.22 billion $3.42 15.01

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

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Comerica and U.S. Bancorp, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Comerica 2 9 14 0 2.48
U.S. Bancorp 3 9 9 0 2.29

Comerica presently has a consensus price target of $97.14, suggesting a potential upside of 5.89%. U.S. Bancorp has a consensus price target of $58.08, suggesting a potential upside of 13.13%. Given U.S. Bancorp’s higher possible upside, analysts plainly believe U.S. Bancorp is more favorable than Comerica.

Dividends

Comerica pays an annual dividend of $1.36 per share and has a dividend yield of 1.5%. U.S. Bancorp pays an annual dividend of $1.20 per share and has a dividend yield of 2.3%. Comerica pays out 28.8% of its earnings in the form of a dividend. U.S. Bancorp pays out 35.1% 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. Comerica has raised its dividend for 6 consecutive years and U.S. Bancorp has raised its dividend for 7 consecutive years. U.S. Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Comerica beats U.S. Bancorp on 9 of the 17 factors compared between the two stocks.

About Comerica

Comerica Incorporated, through its subsidiaries, provides various financial products and services. The company operates through three segments: Business Bank, the Retail Bank, and Wealth Management. The Business Bank segment offers various products and services, such as commercial loans and lines of credit, deposits, cash management, capital market products, international trade finance, letters of credit, foreign exchange management, and loan syndication services to middle market businesses, multinational corporations, and governmental entities. The Retail Bank segment provides small business banking and personal financial services, including consumer lending, consumer deposit gathering, and mortgage loan origination. This segment also offers a range of consumer products comprising deposit accounts, installment loans, credit cards, student loans, home equity lines of credit, and residential mortgage loans. The Wealth Management segment provides products and services consisting of fiduciary, private banking, retirement, investment management and advisory, and investment banking and brokerage services. This segment also sells annuity products, as well as life, disability, and long-term care insurance products. The company operates in Texas, California, and Michigan, as well as in Arizona and Florida, Canada, and Mexico. Comerica Incorporated was founded in 1849 and is headquartered in Dallas, Texas.

About U.S. Bancorp

U.S. Bancorp, a financial services holding company, provides various financial services in the United States. The company operates through five segments: Corporate and Commercial Banking, Consumer and Business Banking, Wealth Management and Investment Services, Payment Services, and Treasury and Corporate Support. It offers depository services, including checking accounts, savings accounts, and time certificate contracts; and lending services, such as traditional credit products, as well as credit card services, leasing financing, import/export trade, asset-backed lending, agricultural finance, and other products. The company also provides ancillary services, such as capital markets, treasury management, and receivable lock-box collection services to corporate customers; and a range of asset management and fiduciary services for individuals, estates, foundations, business corporations, and charitable organizations. In addition, it offers investment and insurance products to its customers principally within its markets, as well as fund administration services to a range of mutual and other funds. Further, it provides corporate and purchasing card, and corporate trust services; and merchant processing services, as well as cash and investment management, ATM processing, mortgage banking, and brokerage and leasing services. The company offers its products and services through operating a network of 3,067 banking offices principally operating in the Midwest and West regions of the United States, and through online services and over mobile devices, as well as operates a network of 4,771 ATMs. U.S. Bancorp was founded in 1863 and is headquartered in Minneapolis, Minnesota.

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