Lakeland Bancorp (LBAI) & Commerce Bancshares (CBSH) Critical Comparison

Lakeland Bancorp (NASDAQ:LBAI) 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 valuation, profitability, dividends, risk, institutional ownership, earnings and analyst recommendations.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Lakeland Bancorp $215.64 million 3.95 $52.58 million $1.11 16.16
Commerce Bancshares $1.26 billion 5.57 $319.38 million $2.77 23.83

Commerce Bancshares has higher revenue and earnings than Lakeland Bancorp. Lakeland 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.

Insider and Institutional Ownership

54.5% of Lakeland Bancorp shares are owned by institutional investors. Comparatively, 64.8% of Commerce Bancshares shares are owned by institutional investors. 6.1% of Lakeland Bancorp shares are owned by company insiders. Comparatively, 4.0% of Commerce Bancshares shares are owned by company 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.

Analyst Ratings

This is a breakdown of current ratings and target prices for Lakeland Bancorp and Commerce Bancshares, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Lakeland Bancorp 0 1 2 0 2.67
Commerce Bancshares 3 7 0 0 1.70

Lakeland Bancorp currently has a consensus price target of $20.75, suggesting a potential upside of 15.66%. Commerce Bancshares has a consensus price target of $63.63, suggesting a potential downside of 3.63%. Given Lakeland Bancorp’s stronger consensus rating and higher probable upside, research analysts clearly believe Lakeland Bancorp is more favorable than Commerce Bancshares.

Dividends

Lakeland Bancorp pays an annual dividend of $0.46 per share and has a dividend yield of 2.6%. Commerce Bancshares pays an annual dividend of $0.94 per share and has a dividend yield of 1.4%. Lakeland Bancorp pays out 41.4% of its earnings in the form of a dividend. Commerce Bancshares pays out 33.9% 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. Lakeland Bancorp has increased its dividend for 8 consecutive years and Commerce Bancshares has increased its dividend for 49 consecutive years.

Risk and Volatility

Lakeland Bancorp has a beta of 0.82, indicating that its share price is 18% less volatile than the S&P 500. Comparatively, Commerce Bancshares has a beta of 0.67, indicating that its share price is 33% less volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Lakeland Bancorp 26.02% 9.99% 1.07%
Commerce Bancshares 28.84% 14.24% 1.49%

Summary

Commerce Bancshares beats Lakeland Bancorp on 11 of the 17 factors compared between the two stocks.

Lakeland Bancorp Company Profile

Lakeland Bancorp, Inc. operates as the bank holding company for Lakeland Bank that provides financial products and services for individuals and small to medium sized businesses. It offers commercial banking services, including savings, money market, and time accounts, as well as demand deposits; lending solutions, such as short and medium term loans, lines of credit, letters of credit, inventory and accounts receivable financing, real estate construction loans, mortgage loans, small business administration loans, commercial real estate loans, commercial and industrial loans, and equipment financing, as well as merchant credit card services; and Internet banking, mobile banking, wire transfer, night depository, and cash management services. The company also provides consumer banking services, including checking accounts, savings accounts, NOW accounts, money market accounts, certificates of deposit, secured and unsecured loans, consumer installment loans, mortgage loans, and safe deposit services, as well as Internet banking services. In addition, it offers investment and advisory services; and non-deposit products, which include securities brokerage services, including mutual funds and variable annuities. As of January 26, 2018, the company operated 53 branch offices throughout Bergen, Essex, Morris, Ocean, Passaic, Somerset, Sussex, and Union counties in New Jersey; 6 New Jersey regional commercial lending centers in Bernardsville, Jackson, Montville, Newton, Teaneck, and Waldwick; 1 commercial lending center in New York to serve the Hudson Valley region; and 1 commercial loan production office serving Middlesex and Monmouth counties in New Jersey. Lakeland Bancorp, Inc. was founded in 1989 and is headquartered in Oak Ridge, New Jersey.

Commerce Bancshares Company Profile

Commerce Bancshares, Inc. operates as the holding company for Commerce Bank that provides retail, mortgage banking, corporate, investment, trust, and asset management products and services to individuals and businesses. 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; personal mortgage banking; consumer installment lending; and consumer debit and credit bank cards, as well as provides online, mobile, and telephone banking services. The Commercial segment offers corporate lending, merchant and commercial bank card, leasing, international, and investment safekeeping and bond accounting services; and business products, government deposits, and related commercial cash management services, as well as sells fixed-income securities to individuals, corporations, correspondent banks, public institutions, and municipalities. The Wealth segment provides traditional trust and estate planning services, brokerage services, and advisory and discretionary investment management services, as well as manages a family of proprietary mutual funds, which are available for sale to trust and general retail customers. The company also offers private equity investment, securities brokerage, and insurance agency services. It operates through a network of 327 locations in Missouri, Kansas, Illinois, Oklahoma, and Colorado, as well as commercial offices. Commerce Bancshares, Inc. was founded in 1865 and is headquartered in Kansas City, Missouri.

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