Financial Contrast: Itau Unibanco (NYSE:ITUB) and Canadian Imperial Bank of Commerce (NYSE:CM)

Itau Unibanco (NYSE:ITUB – Get Free Report) and Canadian Imperial Bank of Commerce (NYSE:CM – Get Free Report) are both large-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, risk, earnings, profitability, institutional ownership, dividends and analyst recommendations.

Analyst Ratings

This is a summary of current ratings for Itau Unibanco and Canadian Imperial Bank of Commerce, as reported by MarketBeat.

Itau Unibanco currently has a consensus price target of $9.00, indicating a potential downside of 0.39%. Canadian Imperial Bank of Commerce has a consensus price target of $107.50, indicating a potential upside of 4.88%. Given Canadian Imperial Bank of Commerce’s stronger consensus rating and higher probable upside, analysts plainly believe Canadian Imperial Bank of Commerce is more favorable than Itau Unibanco.

Insider & Institutional Ownership

49.9% of Canadian Imperial Bank of Commerce shares are owned by institutional investors. 0.6% of Itau Unibanco shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings & Valuation

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

Itau Unibanco has higher earnings, but lower revenue than Canadian Imperial Bank of Commerce. Itau Unibanco 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 Itau Unibanco and Canadian Imperial Bank of Commerce’s net margins, return on equity and return on assets.

Dividends

Itau Unibanco pays an annual dividend of $0.03 per share and has a dividend yield of 0.3%. Canadian Imperial Bank of Commerce pays an annual dividend of $3.14 per share and has a dividend yield of 3.1%. Itau Unibanco pays out 4.3% of its earnings in the form of a dividend. Canadian Imperial Bank of Commerce pays out 45.8% 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 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

Itau Unibanco has a beta of 0.65, meaning that its stock price is 35% less volatile than the S&P 500. Comparatively, Canadian Imperial Bank of Commerce has a beta of 1, meaning that its stock price has a similar volatility profile to the S&P 500.

Summary

Canadian Imperial Bank of Commerce beats Itau Unibanco on 11 of the 18 factors compared between the two stocks.

About Itau Unibanco

(Get Free Report)

Itaú Unibanco Holding S.A. offers a range of financial products and services to individuals and corporate customers in Brazil and internationally. The company operates through three segments: Retail Banking, Wholesale Banking, and Activities with the Market + Corporation. It offers current account; loans; credit and debit cards; investment and commercial banking services; real estate lending services; financing and investment services; economic, financial and brokerage advisory; and leasing and foreign exchange services. The company also provides property and casualty insurance products covering loss, damage, or liabilities for assets or persons, as well as life insurance products covering death and personal accident. It serves retail customers, account and non-account holders, individuals and legal entities, high income clients, microenterprises, and small companies, as well as middle-market companies and high net worth clients. The company was formerly known as Itaú Unibanco Banco Múltiplo S.A. and changed its name to Itaú Unibanco Holding S.A. in April 2009. The company was incorporated in 1924 and is headquartered in São Paulo, Brazil. Itaú Unibanco Holding S.A. operates as a subsidiary of IUPAR – Itaú Unibanco Participações S.A.

About Canadian Imperial Bank of Commerce

(Get Free Report)

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.