Head to Head Analysis: Shinhan Financial Group (NYSE:SHG) and Canadian Imperial Bank of Commerce (NYSE:CM)

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

Profitability

This table compares Shinhan Financial 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
Shinhan Financial Group	20.07%	11.02%	0.86%
Canadian Imperial Bank of Commerce	15.15%	15.69%	0.81%

Valuation and Earnings

This table compares Shinhan Financial Group and Canadian Imperial Bank of Commerce”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Shinhan Financial Group	$23.83 billion	1.27	$3.48 billion	$9.21	6.92
Canadian Imperial Bank of Commerce	$44.36 billion	2.39	$6.02 billion	$6.86	16.81

Canadian Imperial Bank of Commerce has higher revenue and earnings than Shinhan Financial Group. Shinhan Financial 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.

Institutional & Insider Ownership

7.8% of Shinhan Financial Group shares are held by institutional investors. Comparatively, 49.9% of Canadian Imperial Bank of Commerce shares are held by institutional investors. 1.0% of Shinhan Financial Group shares are held 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.

Risk & Volatility

Shinhan Financial Group has a beta of 0.97, suggesting that its share price is 3% less volatile than the S&P 500. Comparatively, Canadian Imperial Bank of Commerce has a beta of 1.05, suggesting that its share price is 5% more volatile than the S&P 500.

Dividends

Shinhan Financial Group pays an annual dividend of $1.86 per share and has a dividend yield of 2.9%. Canadian Imperial Bank of Commerce pays an annual dividend of $3.14 per share and has a dividend yield of 2.7%. Shinhan Financial Group pays out 20.2% 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 increased its dividend for 14 consecutive years. Shinhan Financial Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of recent recommendations for Shinhan Financial Group and Canadian Imperial Bank of Commerce, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Shinhan Financial Group	0	1	1	0	2.50
Canadian Imperial Bank of Commerce	0	3	4	1	2.75

Canadian Imperial Bank of Commerce has a consensus target price of $107.50, indicating a potential downside of 6.77%. Given Canadian Imperial Bank of Commerce’s stronger consensus rating and higher possible upside, analysts plainly believe Canadian Imperial Bank of Commerce is more favorable than Shinhan Financial Group.

Summary

Canadian Imperial Bank of Commerce beats Shinhan Financial Group on 12 of the 18 factors compared between the two stocks.

About Shinhan Financial Group

Shinhan Financial Group Co., Ltd. provides financial products and services in South Korea and internationally. The company operates through six segments: Banking, Credit Card, Securities, Insurance, Credit, and Others. It offers retail banking services, including demand, savings, and fixed deposit-taking; checking accounts; mortgage and home equity, and retail lending; electronic banking and automatic teller machines (ATM); and bill paying, payroll and check-cashing, currency exchange, and wire fund transfer services. The company also provides corporate banking services, such as investment banking, real estate financing, overseas real estate and development project financing, infrastructure and structured financing, equity/venture investments, mergers and acquisitions consulting; securitization and derivatives services comprising securities and derivative products, and foreign exchange trading; business expansion financing and consulting services; and working capital loans and facilities loans. In addition, it is involved in treasury and investment activities in international capital markets consisting of foreign currency-denominated securities trading, foreign exchange trading and services, trade-related financial services, international factoring services, and foreign banking operations. Further, the company offers real estate trust, investment advisory, venture business investment, life and non-life insurance, trust account management, securities brokerage, and asset management services, as well as leasing and equipment financing, savings banking, loan collection and credit reporting, collective investment administration, private equity investment, and financial system development services. Additionally, it provides transaction history inquiries and fund transfers, opening letters of credit, trade finance, payment and collection management, sales and acquisition settlement, business-to-business settlement, sweeping, pooling, ERP interface, host-to-host banking, SWIFT SCORE, and cash and liquidity management service. Shinhan Financial Group Co., Ltd. was founded in 1982 and is headquartered in Seoul, South Korea.

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.