Financial Review: Comerica (NYSE:CMA) versus Old National Bancorp (NASDAQ:ONB)

Comerica (NYSE:CMA) and Old National Bancorp (NASDAQ:ONB) are both mid-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, valuation, earnings, dividends, institutional ownership, profitability and analyst recommendations.

Analyst Recommendations

This is a breakdown of current ratings for Comerica and Old National Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Comerica	5	8	6	0	2.05
Old National Bancorp	0	1	6	2	3.11

Comerica currently has a consensus price target of $63.22, suggesting a potential upside of 7.51%. Old National Bancorp has a consensus price target of $25.67, suggesting a potential upside of 15.98%. Given Old National Bancorp’s stronger consensus rating and higher probable upside, analysts plainly believe Old National Bancorp is more favorable than Comerica.

Valuation and Earnings

This table compares Comerica and Old National Bancorp”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Comerica	$3.29 billion	2.35	$698.00 million	$5.29	11.12
Old National Bancorp	$1.93 billion	3.66	$539.19 million	$1.72	12.87

Comerica has higher revenue and earnings than Old National Bancorp. Comerica is trading at a lower price-to-earnings ratio than Old National Bancorp, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Comerica and Old National Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Comerica	13.98%	12.04%	0.93%
Old National Bancorp	18.24%	10.13%	1.13%

Volatility and Risk

Comerica has a beta of 0.92, suggesting that its stock price is 8% less volatile than the S&P 500. Comparatively, Old National Bancorp has a beta of 0.85, suggesting that its stock price is 15% less volatile than the S&P 500.

Dividends

Comerica pays an annual dividend of $2.84 per share and has a dividend yield of 4.8%. Old National Bancorp pays an annual dividend of $0.56 per share and has a dividend yield of 2.5%. Comerica pays out 53.7% of its earnings in the form of a dividend. Old National Bancorp pays out 32.6% 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.

Insider and Institutional Ownership

80.7% of Comerica shares are owned by institutional investors. Comparatively, 83.7% of Old National Bancorp shares are owned by institutional investors. 0.2% of Comerica shares are owned by insiders. Comparatively, 0.9% of Old National Bancorp shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

Old National Bancorp beats Comerica on 10 of the 16 factors compared between the two stocks.

About Comerica

Comerica Incorporated, through its subsidiaries, provides various financial products and services. The company operates through Commercial Bank, Retail Bank, Wealth Management, and Finance segments. The Commercial Bank segment offers various products and services, including commercial loans and lines of credit, deposits, cash management, payment solutions, card services, capital market products, international trade finance, letters of credit, foreign exchange management services, and loan syndication services for small and middle market businesses, multinational corporations, and governmental entities. The Retail Bank segment provides personal financial services, such as consumer lending, consumer deposit gathering, and mortgage loan origination; and various consumer products that include deposit accounts, installment loans, credit cards, student loans, home equity lines of credit, and residential mortgage loans. The Wealth Management segment offers products and services comprising financial planning, trust and fiduciary services, investment management and advisory, brokerage, private banking, and business transition planning services for affluents, high-net worth and ultra-high-net-worth individuals and families, business owners, and executives, and institutional clients. The Finance segment comprises securities portfolio, and asset and liability management activities. It operates in Texas, California, Michigan, Arizona, and Florida, the United States; and Canada and Mexico. The company was formerly known as DETROITBANK Corporation and changed its name to Comerica Incorporated in July 1982. Comerica Incorporated was founded in 1849 and is headquartered in Dallas, Texas.

About Old National Bancorp

Old National Bancorp operates as the bank holding company for Old National Bank that provides various financial services to individual and commercial customers in the United States. It accepts deposit accounts, including noninterest-bearing demand, interest-bearing checking, negotiable order of withdrawal, savings and money market, and time deposits; and offers loans, such as home equity lines of credit, residential real estate loans, consumer loans, commercial loans, commercial real estate loans, agricultural loans, letters of credit, and lease financing. The company also provides debit and automated teller machine cards, telephone access, online banking, and other electronic and mobile banking services; cash management, private banking, brokerage, trust, investment advisory, and other traditional banking services; wealth management, investment, and foreign currency services; and treasury management, merchant, and capital markets services, as well as community development lending and equity investment solutions. The company was founded in 1834 and is headquartered in Evansville, Indiana.