KBC Group (OTCMKTS:KBCSY) versus Canadian Imperial Bank of Commerce (NYSE:CM) Critical Comparison

Canadian Imperial Bank of Commerce (NYSE:CM) and KBC Group (OTCMKTS:KBCSY) are both large-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, valuation, earnings, institutional ownership, analyst recommendations, risk and profitability.

Institutional & Insider Ownership

49.9% of Canadian Imperial Bank of Commerce shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Canadian Imperial Bank of Commerce and KBC Group”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Canadian Imperial Bank of Commerce	$44.36 billion	1.90	$6.02 billion	$6.09	14.89
KBC Group	$27.10 billion	2.01	$3.69 billion	$5.01	13.02

Canadian Imperial Bank of Commerce has higher revenue and earnings than KBC Group. KBC Group is trading at a lower price-to-earnings ratio than Canadian Imperial Bank of Commerce, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Canadian Imperial Bank of Commerce and KBC Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Canadian Imperial Bank of Commerce	13.57%	14.93%	0.77%
KBC Group	15.91%	13.96%	0.95%

Volatility & Risk

Canadian Imperial Bank of Commerce has a beta of 1.02, meaning that its share price is 2% more volatile than the S&P 500. Comparatively, KBC Group has a beta of 0.54, meaning that its share price is 46% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations for Canadian Imperial Bank of Commerce and KBC Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Canadian Imperial Bank of Commerce	0	3	4	0	2.57
KBC Group	1	4	1	0	2.00

Canadian Imperial Bank of Commerce currently has a consensus price target of $107.50, indicating a potential upside of 18.59%. Given Canadian Imperial Bank of Commerce’s stronger consensus rating and higher possible upside, research analysts plainly believe Canadian Imperial Bank of Commerce is more favorable than KBC Group.

Dividends

Canadian Imperial Bank of Commerce pays an annual dividend of $3.06 per share and has a dividend yield of 3.4%. KBC Group pays an annual dividend of $0.67 per share and has a dividend yield of 1.0%. Canadian Imperial Bank of Commerce pays out 50.2% of its earnings in the form of a dividend. KBC Group pays out 13.4% 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. Canadian Imperial Bank of Commerce has raised its dividend for 14 consecutive years. Canadian Imperial Bank of Commerce is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Canadian Imperial Bank of Commerce beats KBC Group on 12 of the 16 factors compared between the two stocks.

About Canadian Imperial Bank of Commerce

Canadian Imperial Bank of Commerce, a diversified financial institution, provides various financial products and services to personal, business, public sector, and institutional clients in Canada, the United States, and internationally. The company operates through Canadian Personal and Business Banking; Canadian Commercial Banking and Wealth Management; U.S. Commercial Banking and Wealth Management; Capital Markets and Direct Financial Services; and Corporate and Other segments. It offers checking, savings, and business accounts; mortgages; business, car, and other loans; lines of credit, student lines of credit, and agriculture loans; and small business financing and overdraft protection services. The company also provides investment and insurance services; credit cards; and ATMs, as well as mobile, online, and global money and wire transfer services. Canadian Imperial Bank of Commerce was founded in 1867 and is headquartered in Toronto, Canada.

About KBC Group

KBC Group NV, together with its subsidiaries, provides integrated bank-insurance services primarily for retail, private banking, small and medium sized enterprises, and mid-cap clients. The company offers demand deposits and savings accounts; home and mortgage loans; consumer finance and SME funding services; credit, investment fund and asset management, and life and non-life insurance; and cash management, payments, trade finance, lease, money market, capital market products, and stockbroking services. It also provides digital and mobile banking services. The company was formerly known as KBC Bank and Insurance Holding Company NV and changed its name to KBC Group NV in March 2005. KBC Group NV was incorporated in 1935 and is headquartered in Brussels, Belgium.