Comerica CMA continues to reward its shareholders through dividend hikes or additional share repurchases. The company recently announced an additional share-buyback plan, with authorization to repurchase 7 million shares. Notably, the latest authorization adds to the remaining 3.2 million shares as of Sep 30, 2019, under the prior share-repurchase program.
Comerica has also been paying quarterly dividends, along with regular hikes. Since 2013, the company has raised its dividend 10 times. The dividend was last hiked in January 2019 by 12% to 67 cents per share.
Comerica has rallied 3.6% year to date compared with the industry’s growth of 28%. Currently, the stock carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
With strong liquidity and balance-sheet position, we believe Comerica will continue to reward its shareholders, moving ahead. So, keeping this in mind, is the company worth considering? Let’s dig deeper into its financials and fundamental strengths.
Stock is Undervalued: With respect to the price-to-earnings (P/E) and price-to-cash flow (P/CF) ratios, Comerica looks undervalued. The company’s P/E ratio of 9.16 comes in below the industry average of 12.2. Also, the P/CF ratio of the company is 8.3 compared with the industry average of 9.52.
Revenue Strength: Comerica continues to make steady progress toward improving its top line. Revenues witnessed a 9.1% compounded annual growth rate (CAGR) over the last five years (2014-2018). Moreover, the company’s projected sales growth (F1/F0) of 0.7% indicates constant upward momentum in revenues.
Earnings Growth: Comerica has witnessed earnings growth of 28.8% in the last three-five years compared with industry’s 13.49% growth. In addition, the company’s long-term (three-five years) estimated EPS growth rate of 16.3% promises rewards for investors over the long run. Additionally, it delivered average positive earnings surprise of 1.47% in the preceding four quarters.
Superior Return on Equity (ROE): Comerica’s ROE of 16.82%, compared with the industry average of 12.15%, underlines the company’s commendable position over its peers.
Recently, among other finance stocks, Webster Financial Corporation WBS, Wintrust Financial Corporation WTFC and Fulton Financial Corporation FULT also announced share-repurchase authorizations.
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Comerica Incorporated (CMA) : Free Stock Analysis Report
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