Canadian Imperial Bank of Commerce (NYSE:CM) and Westpac Banking (OTCMKTS:WEBNF) Financial Analysis

Westpac Banking (OTCMKTS:WEBNF) and Canadian Imperial Bank of Commerce (NYSE:CM) are both financial services companies, but which is the superior stock? We will compare the two businesses based on the strength of their dividends, valuation, profitability, earnings, institutional ownership, analyst recommendations and risk.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Westpac Banking	N/A	N/A	N/A
Canadian Imperial Bank of Commerce	10.79%	13.07%	0.66%

Insider & Institutional Ownership

13.9% of Westpac Banking shares are owned by institutional investors. Comparatively, 49.9% of Canadian Imperial Bank of Commerce shares are owned by institutional investors. 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.

Valuation & Earnings

This table compares Westpac Banking and Canadian Imperial Bank of Commerce’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Westpac Banking	N/A	N/A	N/A	C$2.39	7.25
Canadian Imperial Bank of Commerce	$41.16 billion	1.11	$3.70 billion	$4.84	10.04

Canadian Imperial Bank of Commerce has higher revenue and earnings than Westpac Banking. Westpac Banking 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.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Westpac Banking and Canadian Imperial Bank of Commerce, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Westpac Banking	1	1	0	0	1.50
Canadian Imperial Bank of Commerce	1	2	4	0	2.43

Canadian Imperial Bank of Commerce has a consensus target price of $63.00, indicating a potential upside of 29.71%. Given Canadian Imperial Bank of Commerce’s stronger consensus rating and higher possible upside, analysts clearly believe Canadian Imperial Bank of Commerce is more favorable than Westpac Banking.

Dividends

Westpac Banking pays an annual dividend of C$1.78 per share and has a dividend yield of 10.3%. Canadian Imperial Bank of Commerce pays an annual dividend of $2.65 per share and has a dividend yield of 5.5%. Westpac Banking pays out 74.6% of its earnings in the form of a dividend. Canadian Imperial Bank of Commerce pays out 54.8% 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 13 consecutive years.

Summary

Canadian Imperial Bank of Commerce beats Westpac Banking on 12 of the 13 factors compared between the two stocks.

About Westpac Banking

Westpac Banking Corporation provides various banking and financial services in Australia, New Zealand, and internationally. The company operates through Consumer, Business, Consumer and Business Banking, Westpac Institutional Bank, Specialist Businesses, and Westpac New Zealand segments. It offers savings, term deposit, business transaction, not-for-profit transaction, foreign currency, farm management deposit, project and retention trust, and statutory trust accounts; home, personal, business, and commercial loans; car and equipment finance; business overdrafts and bank guarantees; debit and credit cards; international and travel services; share trading services; investment products; and home, car, travel, life, caravan and trailer, credit card and loan repayment, boat, and business insurance products. In addition, the company provides corporate and institutional, transaction banking, financial market, corporate and structured finance, trade and supply chain financing, and industry specific banking and treasury services, as well as online banking services. It serves individuals; small, and medium enterprises; commercial and agribusiness; and private wealth clients; and corporate, institutional, and government customers. The company was formerly known as Bank of New South Wales and changed its name to Westpac Banking Corporation in October 1982. Westpac Banking Corporation was founded in 1817 and is based in Sydney, Australia.

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.