Canadian Imperial Bank of Commerce (NYSE:CM) and The Toronto-Dominion Bank (NYSE:TD) are both large-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, earnings, analyst recommendations, valuation, profitability and risk.
Insider and Institutional Ownership
42.6% of Canadian Imperial Bank of Commerce shares are owned by institutional investors. Comparatively, 48.0% of The Toronto-Dominion Bank shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Volatility & Risk
Canadian Imperial Bank of Commerce has a beta of 1.12, indicating that its stock price is 12% more volatile than the S&P 500. Comparatively, The Toronto-Dominion Bank has a beta of 1.04, indicating that its stock price is 4% more volatile than the S&P 500.
Dividends
Canadian Imperial Bank of Commerce pays an annual dividend of $4.49 per share and has a dividend yield of 4.7%. The Toronto-Dominion Bank pays an annual dividend of $2.48 per share and has a dividend yield of 4.0%. Canadian Imperial Bank of Commerce pays out 62.3% of its earnings in the form of a dividend. The Toronto-Dominion Bank pays out 62.2% 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 increased its dividend for 1 consecutive years and The Toronto-Dominion Bank has increased its dividend for 1 consecutive years.
Analyst Ratings
This is a summary of recent ratings and target prices for Canadian Imperial Bank of Commerce and The Toronto-Dominion Bank, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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Canadian Imperial Bank of Commerce | 1 | 3 | 9 | 0 | 2.62 |
The Toronto-Dominion Bank | 4 | 5 | 3 | 0 | 1.92 |
Canadian Imperial Bank of Commerce currently has a consensus price target of $107.75, indicating a potential upside of 13.46%. The Toronto-Dominion Bank has a consensus price target of $75.25, indicating a potential upside of 21.04%. Given The Toronto-Dominion Bank's higher possible upside, analysts clearly believe The Toronto-Dominion Bank is more favorable than Canadian Imperial Bank of Commerce.
Earnings & Valuation
This table compares Canadian Imperial Bank of Commerce and The Toronto-Dominion Bank's gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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Canadian Imperial Bank of Commerce | $18.76 billion | 2.27 | $2.82 billion | $7.21 | 13.17 |
The Toronto-Dominion Bank | $39.92 billion | 2.83 | $8.85 billion | $3.99 | 15.58 |
The Toronto-Dominion Bank has higher revenue and earnings than Canadian Imperial Bank of Commerce. Canadian Imperial Bank of Commerce is trading at a lower price-to-earnings ratio than The Toronto-Dominion Bank, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Canadian Imperial Bank of Commerce and The Toronto-Dominion Bank's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
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Canadian Imperial Bank of Commerce | 15.06% | 12.03% | 0.61% |
The Toronto-Dominion Bank | 22.23% | 11.63% | 0.62% |
Summary
The Toronto-Dominion Bank beats Canadian Imperial Bank of Commerce on 8 of the 15 factors compared between the two stocks.