Critical Survey: Canadian Imperial Bank of Commerce (NYSE:CM) vs. Lloyds Banking Group (NYSE:LYG)

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

Earnings & Valuation

This table compares Lloyds Banking Group and Canadian Imperial Bank of Commerce”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lloyds Banking Group	$18.79 billion	2.16	$6.79 billion	$0.39	6.87
Canadian Imperial Bank of Commerce	$25.53 billion	2.36	$5.23 billion	$5.35	11.92

Lloyds Banking Group has higher earnings, but lower revenue than Canadian Imperial Bank of Commerce. Lloyds Banking 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.

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lloyds Banking Group	0	7	3	0	2.30
Canadian Imperial Bank of Commerce	1	2	6	0	2.56

Lloyds Banking Group presently has a consensus price target of $2.75, indicating a potential upside of 2.61%. Canadian Imperial Bank of Commerce has a consensus price target of $89.00, indicating a potential upside of 39.54%. 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 Lloyds Banking Group.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Lloyds Banking Group	10.89%	9.81%	0.51%
Canadian Imperial Bank of Commerce	11.10%	14.01%	0.72%

Insider & Institutional Ownership

2.2% of Lloyds Banking Group shares are owned by institutional investors. Comparatively, 49.9% of Canadian Imperial Bank of Commerce shares are owned by institutional investors. 0.0% of Lloyds Banking Group shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

Lloyds Banking Group pays an annual dividend of $0.10 per share and has a dividend yield of 3.7%. Canadian Imperial Bank of Commerce pays an annual dividend of $2.86 per share and has a dividend yield of 4.5%. Lloyds Banking Group pays out 25.6% of its earnings in the form of a dividend. Canadian Imperial Bank of Commerce pays out 53.5% 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 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.

Volatility & Risk

Lloyds Banking Group has a beta of 1.32, meaning that its share price is 32% more volatile than the S&P 500. Comparatively, Canadian Imperial Bank of Commerce has a beta of 1.06, meaning that its share price is 6% more volatile than the S&P 500.

Summary

Canadian Imperial Bank of Commerce beats Lloyds Banking Group on 13 of the 17 factors compared between the two stocks.

About Lloyds Banking Group

Lloyds Banking Group plc, together with its subsidiaries, provides a range of banking and financial services in the United Kingdom and internationally. It operates in three segments: Retail; Commercial Banking; and Insurance, Pensions and Investments. The Retail segment offers a range of financial service products, including current accounts, savings, mortgages, motor finance, unsecured loans, leasing solutions, and credit cards to personal customers. The Commercial Banking segment provides lending, transactional banking, working capital management, risk management, and debt financing services to small and medium-sized entities, corporates, and institutions. The Insurance, Pensions, and Investments segment offers insurance, investment, and pension management products and services. It also provides digital banking services. The company offers its products and services under the Lloyds Bank, Halifax, Bank of Scotland, Scottish Widows, MBNA, Schroders Personal Wealth, Black Horse, Lex Autolease, Birmingham Midshires, LDC, AMC, Embark Group, Citra, IWeb, Cavendish Online, and Tusker brand names. Lloyds Banking Group plc was founded in 1695 and is headquartered in London, the United Kingdom.

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.