Financial Survey: Northwest Bancshares (NWBI) vs. Comerica (NYSE:CMA)

Comerica (NYSE:CMA) and Northwest Bancshares (NASDAQ:NWBI) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, valuation, earnings, analyst recommendations, risk, institutional ownership and dividends.

Earnings & Valuation

This table compares Comerica and Northwest Bancshares’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Comerica $3.60 billion 2.95 $1.24 billion $7.24 9.51
Northwest Bancshares $467.48 million 3.72 $105.49 million $1.02 16.44

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

Institutional and Insider Ownership

83.6% of Comerica shares are owned by institutional investors. Comparatively, 72.2% of Northwest Bancshares shares are owned by institutional investors. 1.0% of Comerica shares are owned by company insiders. Comparatively, 1.4% of Northwest Bancshares shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Risk & Volatility

Comerica has a beta of 1.43, indicating that its share price is 43% more volatile than the S&P 500. Comparatively, Northwest Bancshares has a beta of 0.69, indicating that its share price is 31% less volatile than the S&P 500.

Profitability

This table compares Comerica and Northwest Bancshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Comerica 34.75% 16.95% 1.83%
Northwest Bancshares 22.08% 8.48% 1.10%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Comerica and Northwest Bancshares, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Comerica 2 15 7 1 2.28
Northwest Bancshares 0 1 0 0 2.00

Comerica currently has a consensus target price of $91.90, indicating a potential upside of 33.54%. Given Comerica’s stronger consensus rating and higher probable upside, research analysts clearly believe Comerica is more favorable than Northwest Bancshares.

Dividends

Comerica pays an annual dividend of $2.68 per share and has a dividend yield of 3.9%. Northwest Bancshares pays an annual dividend of $0.72 per share and has a dividend yield of 4.3%. Comerica pays out 37.0% of its earnings in the form of a dividend. Northwest Bancshares pays out 70.6% 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 increased its dividend for 7 consecutive years and Northwest Bancshares has increased its dividend for 3 consecutive years.

Summary

Comerica beats Northwest Bancshares on 14 of the 18 factors compared between the two stocks.

About Comerica

Comerica Incorporated, through its subsidiaries, provides various financial products and services. It operates through three segments: Business Bank, Retail Bank, and Wealth Management. The Business Bank segment offers various products and services, including commercial loans and lines of credit, deposits, cash management, capital market products, international trade finance, letters of credit, foreign exchange management services, and loan syndication services middle market businesses, multinational corporations, and governmental entities. The Retail Bank segment provides personal financial services, such as consumer lending, consumer deposit gathering, and mortgage loan origination. It also offers various consumer products that include 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 comprising fiduciary, private banking, retirement, investment management and advisory, and investment banking and brokerage services. It also sells annuity products; and life, disability, and long-term care insurance products. The company also engages in the securities portfolio, and asset and liability management activities. It operates in Texas, California, and Michigan, as well as in Arizona and Florida, Canada, and Mexico. The company was formerly known as DETROITBANK Corporation and changed its name to Comerica Incorporated in July 1982. Comerica Incorporated was founded in 1849 and is headquartered in Dallas, Texas.

About Northwest Bancshares

Northwest Bancshares, Inc. is a holding company. It offers personal & business banking products including employee benefits, investment management services, insurance and trust. It engages in collecting deposits and making loans secured by various types of collateral, including real estate and other assets. The company was founded on June 29, 2001 and is headquartered in Warren, PA.

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