Comparing Columbia Banking System (COLB) and Commerce Bancshares (CBSH)

Columbia Banking System (NASDAQ:COLB) and Commerce Bancshares (NASDAQ:CBSH) are both mid-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, valuation, analyst recommendations, earnings, institutional ownership, risk and dividends.

Insider and Institutional Ownership

89.7% of Columbia Banking System shares are held by institutional investors. Comparatively, 64.8% of Commerce Bancshares shares are held by institutional investors. 1.1% of Columbia Banking System shares are held by insiders. Comparatively, 4.0% of Commerce Bancshares shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Columbia Banking System and Commerce Bancshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Columbia Banking System 25.30% 9.13% 1.38%
Commerce Bancshares 30.97% 15.56% 1.64%

Volatility and Risk

Columbia Banking System has a beta of 1.09, suggesting that its share price is 9% more volatile than the S&P 500. Comparatively, Commerce Bancshares has a beta of 0.67, suggesting that its share price is 33% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and target prices for Columbia Banking System and Commerce Bancshares, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Columbia Banking System 0 2 2 0 2.50
Commerce Bancshares 3 7 0 0 1.70

Columbia Banking System currently has a consensus price target of $48.75, indicating a potential upside of 39.64%. Commerce Bancshares has a consensus price target of $63.63, indicating a potential upside of 3.47%. Given Columbia Banking System’s stronger consensus rating and higher probable upside, research analysts plainly believe Columbia Banking System is more favorable than Commerce Bancshares.

Dividends

Columbia Banking System pays an annual dividend of $1.04 per share and has a dividend yield of 3.0%. Commerce Bancshares pays an annual dividend of $0.94 per share and has a dividend yield of 1.5%. Columbia Banking System pays out 47.5% 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. Columbia Banking System has increased its dividend for 7 consecutive years and Commerce Bancshares has increased its dividend for 49 consecutive years.

Valuation and Earnings

This table compares Columbia Banking System and Commerce Bancshares’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Columbia Banking System $484.39 million 5.28 $112.82 million $2.19 15.94
Commerce Bancshares $1.26 billion 5.19 $319.38 million $2.77 22.20

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

Summary

Commerce Bancshares beats Columbia Banking System on 10 of the 17 factors compared between the two stocks.

Columbia Banking System Company Profile

Columbia Banking System, Inc. operates as the bank holding company for Columbia State Bank that provides a range of banking services to small and medium-sized businesses, professionals, and individuals in Washington, Oregon, and Idaho. It offers personal banking products and services, including noninterest and interest-bearing checking, saving, money market, and certificate of deposit accounts; home mortgages for purchases and refinances, home equity loans and lines of credit, and personal loans; debit and credit cards; and digital banking services. The company also provides business banking products and services, such as checking, savings, interest-bearing money market, and certificate of deposit accounts; agricultural loans, asset-based loans, builder and other commercial real estate loans, and loans guaranteed by the small business administration; debit and credit cards; and professional banking, treasury management, merchant card, and international banking services. In addition, it offers wealth management services in the areas of private banking, financial services, and trust and investment services to individuals, families, and professional businesses. Further, the company provides fiduciary, agency, trust, and related services, as well as life insurance products. As of December 31, 2017, the company had 155 branches. Columbia Banking System, Inc. was founded in 1993 and is headquartered in Tacoma, Washington.

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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