Comerica Inc Valuation – March 2019 #CMA

Company Profile (excerpt from Reuters): Comerica Incorporated, incorporated on November 13, 1972, is a financial services company. The Company’s principal activity is lending to and accepting deposits from businesses and individuals. The Company’s segments include the Business Bank, the Retail Bank, Wealth Management, Finance and Other. The Business Bank serves middle market businesses, multinational corporations and governmental entities by offering various products and services, including commercial loans and lines of credit, deposits, cash management, capital market products, international trade finance, letters of credit, foreign exchange management services and loan syndication services. The Retail Bank includes small business banking and personal financial services, consisting of consumer lending, consumer deposit gathering and mortgage loan origination. In addition to a range of financial services provided to small business customers, this business segment offers a range of consumer products, including deposit accounts, installment loans, credit cards, student loans, home equity lines of credit and residential mortgage loans.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of CMA – March 2019

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass all 6 of the following tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $12,991,666,519 Pass
2. Earnings Stability Positive EPS for 10 years prior Pass
3. Dividend Record Dividend Payments for 10 years prior Pass
4. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 238.83% Pass
5. Moderate PEmg Ratio PEmg < 20 13.98 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.81 Pass
Enterprising Investor; must pass all 3 of the following tests, or be suitable for the Defensive Investor.
1. Earnings Stability Positive EPS for 5 years prior Pass
2. Dividend Record Currently Pays Dividend Pass
3. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $5.88
MG Growth Estimate 15.00%
MG Value $226.56
Opinion Undervalued
MG Grade A
MG Value based on 3% Growth $85.33
MG Value based on 0% Growth $50.02
Market Implied Growth Rate 2.74%
Current Price $82.27
% of Intrinsic Value 36.31%

Comerica Incorporated qualifies for both the Defensive Investor and the Enterprising Investor. In fact, the company meets all of the requirements of both investor types, a rare accomplishment indicative of the company’s strong financial position . The Enterprising Investor has no initial concerns. As a result, all value investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $2.85 in 2015 to an estimated $5.88 for 2019. This level of demonstrated earnings growth outpaces the market’s implied estimate of 2.74% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Comerica Incorporated revealed the company was trading below its Graham Number of $90.55. The company pays a dividend of $1.84 per share, for a yield of 2.2%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 13.98, which was below the industry average of 16.75, which by some methods of valuation makes it one of the most undervalued stocks in its industry.

Comerica Incorporated fares extremely well in the ModernGraham grading system, scoring an A.

Stage 3: Information for Further Research

Graham Number $90.55
PEmg 13.98
PB Ratio 1.81
Dividend Yield 2.24%
TTM Dividend $1.84
Number of Consecutive Years of Dividend Growth 9

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 12/1/2018
Long-Term Debt & Capital Lease Obligation $6,463,000,000
Total Assets $70,818,000,000
Intangible Assets $0
Total Liabilities $63,311,000,000
Shares Outstanding (Diluted Average) 165,000,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $7.77
Dec2018 $7.20
Dec2017 $4.14
Dec2016 $2.68
Dec2015 $2.84
Dec2014 $3.16
Dec2013 $2.85
Dec2012 $2.67
Dec2011 $2.09
Dec2010 $0.88
Dec2009 -$0.79
Dec2008 $1.28
Dec2007 $4.43
Dec2006 $5.49
Dec2005 $5.11
Dec2004 $4.36
Dec2003 $3.75
Dec2002 $3.40
Dec2001 $3.88
Dec2000 $4.31
Dec1999 $4.14

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $5.88
Dec2018 $4.63
Dec2017 $3.27
Dec2016 $2.84
Dec2015 $2.85
Dec2014 $2.68
Dec2013 $2.14
Dec2012 $1.60
Dec2011 $1.24
Dec2010 $1.30
Dec2009 $2.04
Dec2008 $3.68
Dec2007 $4.79
Dec2006 $4.79
Dec2005 $4.33
Dec2004 $3.94
Dec2003 $3.78

Recommended Reading:

Other ModernGraham posts about the company

Comerica Inc Valuation – June 2018 $CMA
11 Best Stocks for Value Investors This Week – 3/4/17
Comerica Inc Valuation – March 2017 $CMA
21 Best Undervalued Stocks of the Week – 8/27/16
Comerica Inc Valuation – August 2016 $CMA

Other ModernGraham posts about related companies

SVB Financial Group Valuation – March 2019 #SIVB
US Bancorp Valuation – March 2019 #USB
Citizens Financial Group Inc Valuation – February 2019 $CFG
BB&T Corp Valuation – February 2019 $BBT
M&T Bank Corp Valuation – February 2019 $MTB
Bank of America Corp Valuation – January 2019 $BAC
Fifth Third Bancorp Valuation – January 2019 $FITB
Zions Bancorp Valuation – January 2019 $ZION
Regions Financial Corp Valuation – January 2019 $RF
Huntington Bancshares Inc Valuation – January 2019 $HBAN

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Comerica Inc Valuation – June 2018 $CMA

Company Profile (excerpt from Reuters): Comerica Incorporated, incorporated on November 13, 1972, is a financial services company. The Company’s principal activity is lending to and accepting deposits from businesses and individuals. The Company’s segments include the Business Bank, the Retail Bank, Wealth Management, Finance and Other. The Business Bank serves middle market businesses, multinational corporations and governmental entities by offering various products and services, including commercial loans and lines of credit, deposits, cash management, capital market products, international trade finance, letters of credit, foreign exchange management services and loan syndication services. The Retail Bank includes small business banking and personal financial services, consisting of consumer lending, consumer deposit gathering and mortgage loan origination. In addition to a range of financial services provided to small business customers, this business segment offers a range of consumer products, including deposit accounts, installment loans, credit cards, student loans, home equity lines of credit and residential mortgage loans.

CMA Chart

CMA data by YCharts

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of CMA – June 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass all 6 of the following tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $16,612,192,440 Pass
2. Earnings Stability Positive EPS for 10 years prior Fail
3. Dividend Record Dividend Payments for 10 years prior Pass
4. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 504.13% Pass
5. Moderate PEmg Ratio PEmg < 20 22.23 Fail
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 2.11 Pass
Enterprising Investor; must pass all 3 of the following tests, or be suitable for the Defensive Investor.
1. Earnings Stability Positive EPS for 5 years prior Pass
2. Dividend Record Currently Pays Dividend Pass
3. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $4.35
MG Growth Estimate 9.28%
MG Value $117.62
Opinion Fairly Valued
MG Grade C
MG Value based on 3% Growth $63.02
MG Value based on 0% Growth $36.94
Market Implied Growth Rate 6.87%
Current Price $96.62
% of Intrinsic Value 82.14%

Comerica Incorporated is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings stability over the last ten years, and the high PEmg ratio. The Enterprising Investor has no initial concerns. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Fairly Valued after growing its EPSmg (normalized earnings) from $2.68 in 2014 to an estimated $4.35 for 2018. This level of demonstrated earnings growth supports the market’s implied estimate of 6.87% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value within a margin of safety relative to the price.

At the time of valuation, further research into Comerica Incorporated revealed the company was trading above its Graham Number of $81.13. The company pays a dividend of $1.09 per share, for a yield of 1.1% Its PEmg (price over earnings per share – ModernGraham) was 22.23, which was above the industry average of 21.57.

Comerica Incorporated receives an average overall rating in the ModernGraham grading system, scoring a C.

Stage 3: Information for Further Research

Graham Number $81.13
PEmg 22.23
PB Ratio 2.11
Dividend Yield 1.13%
TTM Dividend $1.09
Number of Consecutive Years of Dividend Growth 8

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 3/1/2018
Long-Term Debt & Capital Lease Obligation $5,594,000,000
Total Assets $72,335,000,000
Intangible Assets $0
Total Liabilities $64,335,000,000
Shares Outstanding (Diluted Average) 175,000,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $6.35
Dec2017 $4.14
Dec2016 $2.68
Dec2015 $2.84
Dec2014 $3.16
Dec2013 $2.85
Dec2012 $2.67
Dec2011 $2.09
Dec2010 $0.88
Dec2009 -$0.79
Dec2008 $1.28
Dec2007 $4.43
Dec2006 $5.49
Dec2005 $5.11
Dec2004 $4.36
Dec2003 $3.75
Dec2002 $3.40
Dec2001 $3.88
Dec2000 $4.31
Dec1999 $4.14
Dec1998 $3.72

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $4.35
Dec2017 $3.27
Dec2016 $2.84
Dec2015 $2.85
Dec2014 $2.68
Dec2013 $2.14
Dec2012 $1.60
Dec2011 $1.24
Dec2010 $1.30
Dec2009 $2.04
Dec2008 $3.68
Dec2007 $4.79
Dec2006 $4.79
Dec2005 $4.33
Dec2004 $3.94
Dec2003 $3.78
Dec2002 $3.83

Recommended Reading:

Other ModernGraham posts about the company

Comerica Inc Valuation – August 2016 $CMA
Best Stocks to Invest In: the Bank Industry – August 2016
Comerica Inc Stock Valuation – February 2016 $CMA
7 Best Stocks For Value Investors This Week – 10/24/15
The Best Companies of the Banking Industry – October 2015

Other ModernGraham posts about related companies

SVB Financial Group Valuation – June 2018 $SIVB
US Bancorp Valuation – May 2018 $USB
Bank of New York Mellon Corp Valuation – May 2018 $BK
Citizens Financial Group Inc Valuation – April 2018 $CFG
BB&T Corporation Valuation – April 2018 $BBT
M&T Bank Corp Valuation – April 2018 $MTB
Bank of America Corp Valuation – March 2018 $BAC
Fifth Third Bancorp Valuation – March 2018 $FITB
Regions Financial Corp Valuation – March 2018 $RF
Huntington Bancshares Inc Valuation – March 2018 $HBAN

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Comerica Inc Valuation – March 2017 $CMA

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Stocks for Using A Benjamin Graham Value Investing Strategy – February 2017.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how Comerica Inc (CMA) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Comerica Incorporated is a financial services company. The Company’s principal activity is lending to and accepting deposits from businesses and individuals. The Company’s segments include the Business Bank, the Retail Bank, Wealth Management, Finance and Other. The Business Bank serves middle market businesses, multinational corporations and governmental entities by offering various products and services, including commercial loans and lines of credit, deposits, cash management, capital market products, international trade finance, letters of credit, foreign exchange management services and loan syndication services. The Retail Bank includes small business banking and personal financial services, consisting of consumer lending, consumer deposit gathering and mortgage loan origination. The Wealth Management segment offers products and services consisting of fiduciary services, private banking, retirement services, investment advisory services, investment banking and brokerage services.

CMA Chart

CMA data by YCharts

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Downloadable PDF version of this valuation:

ModernGraham Valuation of CMA – March 2017

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass all 6 of the following tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $13,722,751,735 Pass
2. Earnings Stability Positive EPS for 10 years prior Fail
3. Dividend Record Dividend Payments for 10 years prior Pass
4. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 575.91% Pass
5. Moderate PEmg Ratio PEmg < 20 23.75 Fail
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.69 Pass
Enterprising Investor; must pass all 3 of the following tests, or be suitable for the Defensive Investor.
1. Earnings Stability Positive EPS for 5 years prior Pass
2. Dividend Record Currently Pays Dividend Pass
3. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

EPSmg $3.14
MG Growth Estimate 6.97%
MG Value $70.45
Opinion Fairly Valued
MG Grade C-
MG Value based on 3% Growth $45.54
MG Value based on 0% Growth $26.70
Market Implied Growth Rate 7.62%
Current Price $74.58
% of Intrinsic Value 105.86%

Comerica Incorporated is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings stability over the last ten years, and the high PEmg ratio. The Enterprising Investor has no initial concerns. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Fairly Valued after growing its EPSmg (normalized earnings) from $2.14 in 2013 to an estimated $3.14 for 2017. This level of demonstrated earnings growth supports the market’s implied estimate of 7.62% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value within a margin of safety relative to the price.

At the time of valuation, further research into Comerica Incorporated revealed the company was trading above its Graham Number of $61.17. The company pays a dividend of $0.89 per share, for a yield of 1.2% Its PEmg (price over earnings per share – ModernGraham) was 23.75, which was above the industry average of 21.43.

Comerica Incorporated receives an average overall rating in the ModernGraham grading system, scoring a C-.

Stage 3: Information for Further Research

Graham Number $61.17
PEmg 23.75
PB Ratio 1.69
Dividend Yield 1.19%
TTM Dividend $0.89
Number of Consecutive Years of Dividend Growth 8

[/not-level-free]

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 12/1/2016
Long-Term Debt & Capital Lease Obligation $5,160,000,000
Total Assets $72,978,000,000
Intangible Assets $643,000,000
Total Liabilities $65,182,000,000
Shares Outstanding (Diluted Average) 177,000,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $3.74
Dec2016 $2.68
Dec2015 $2.84
Dec2014 $3.16
Dec2013 $2.85
Dec2012 $2.67
Dec2011 $2.09
Dec2010 $0.88
Dec2009 -$0.79
Dec2008 $1.28
Dec2007 $4.43
Dec2006 $5.49
Dec2005 $5.11
Dec2004 $4.36
Dec2003 $3.75
Dec2002 $3.40
Dec2001 $3.88
Dec2000 $4.31
Dec1999 $4.14
Dec1998 $3.72
Dec1997 $3.19

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $3.14
Dec2016 $2.84
Dec2015 $2.85
Dec2014 $2.68
Dec2013 $2.14
Dec2012 $1.60
Dec2011 $1.24
Dec2010 $1.30
Dec2009 $2.04
Dec2008 $3.68
Dec2007 $4.79
Dec2006 $4.79
Dec2005 $4.33
Dec2004 $3.94
Dec2003 $3.78
Dec2002 $3.83
Dec2001 $3.98

Recommended Reading:

Other ModernGraham posts about the company

Comerica Inc Valuation – August 2016 $CMA
Best Stocks to Invest In: the Bank Industry – August 2016
Comerica Inc Stock Valuation – February 2016 $CMA
7 Best Stocks For Value Investors This Week – 10/24/15
The Best Companies of the Banking Industry – October 2015

Other ModernGraham posts about related companies

Sterling Bancorp Valuation – Initial Coverage $STL
S&T Bancorp Inc Valuation – Initial Coverage $STBA
Central Pacific Financial Corp Valuation – Initial Coverage $CPF
Synovus Financial Corp Valuation – Initial Coverage $SNV
U.S. Bancorp Valuation – February 2017 $USB
Columbia Banking System Inc Valuation – Initial Coverage $COLB
Canadian Imperial Bank of Commerce Valuation – Initial Coverage $TSE:CM
SVB Financial Group Valuation – Initial Coverage $SIVB
Bank of New York Mellon Corp Valuation – January 2017 $BK
Simmons First National Corporation Valuation – Initial Coverage $SFNC

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Comerica Inc Valuation – August 2016 $CMA

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Stocks for Using A Benjamin Graham Value Investing Strategy – August 2016.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how Comerica Inc (CMA) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Comerica Incorporated (Comerica) is a financial services company. The Company’s principal activity is lending to and accepting deposits from businesses and individuals. Comerica has its operations in three business segments: the Business Bank, the Retail Bank and Wealth Management. In addition to the three business segments, it also operates in the Finance segment. The Business Bank segment serves middle market businesses, multinational corporations and governmental entities by offering various products and services. The Retail Bank segment includes small business banking and personal financial services, consisting of consumer lending, consumer deposit gathering and mortgage loan origination. The Wealth Management segment offers fiduciary services, private banking, retirement services, investment management and advisory services, investment banking and brokerage services. The Finance segment includes its securities portfolio, and asset and liability management activities.

CMA Chart

CMA data by YCharts

[level-free]
To read the details of this valuation, you must be logged in as a premium member. If you are not a premium member, please consider becoming one.

Premium members can view a full ModernGraham valuation of the company and have access to download a PDF version of the valuation for easy reference. Here is a free sample valuation pdf, and here is a post detailing what can be found within each individual company’s valuation.

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Downloadable PDF version of this valuation:

ModernGraham Valuation of CMA – August 2016

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass all 6 of the following tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $7,940,463,120 Pass
2. Earnings Stability Positive EPS for 10 years prior Fail
3. Dividend Record Dividend Payments for 10 years prior Pass
4. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 64.23% Pass
5. Moderate PEmg Ratio PEmg < 20 17.33 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.05 Pass
Enterprising Investor; must pass all 3 of the following tests, or be suitable for the Defensive Investor.
1. Earnings Stability Positive EPS for 5 years prior Pass
2. Dividend Record Currently Pays Dividend Pass
3. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

CMA value chart August 2016

EPSmg $2.64
MG Growth Estimate 9.70%
MG Value $73.70
Opinion Undervalued
MG Grade C-
MG Value based on 3% Growth $38.29
MG Value based on 0% Growth $22.45
Market Implied Growth Rate 4.41%
Current Price $45.76
% of Intrinsic Value 62.09%

Comerica Incorporated is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings stability over the last ten years. The Enterprising Investor has no initial concerns. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $1.6 in 2012 to an estimated $2.64 for 2016. This level of demonstrated earnings growth outpaces the market’s implied estimate of 4.41% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Comerica Incorporated revealed the company was trading above its Graham Number of $45.5. The company pays a dividend of $0.85 per share, for a yield of 1.9% Its PEmg (price over earnings per share – ModernGraham) was 17.33, which was above the industry average of 13.43.

Comerica Incorporated receives an average overall rating in the ModernGraham grading system, scoring a C-.

Stage 3: Information for Further Research

CMA charts August 2016

Graham Number $45.50
PEmg 17.33
PB Ratio 1.05
Dividend Yield 1.86%
TTM Dividend $0.85
Number of Consecutive Years of Dividend Growth 7

[/not-level-free]

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 6/1/2016
Long-Term Debt & Capital Lease Obligation $5,921,000,000
Total Assets $71,280,000,000
Intangible Assets $0
Total Liabilities $63,586,000,000
Shares Outstanding (Diluted Average) 177,000,000

Earnings Per Share History

Next Fiscal Year Estimate $2.08
Dec2015 $2.84
Dec2014 $3.16
Dec2013 $2.85
Dec2012 $2.67
Dec2011 $2.09
Dec2010 $0.88
Dec2009 -$0.79
Dec2008 $1.28
Dec2007 $4.43
Dec2006 $5.49
Dec2005 $5.11
Dec2004 $4.36
Dec2003 $3.75
Dec2002 $3.40
Dec2001 $3.88
Dec2000 $4.31
Dec1999 $4.14
Dec1998 $3.72
Dec1997 $3.19
Dec1996 $2.38

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $2.64
Dec2015 $2.85
Dec2014 $2.68
Dec2013 $2.14
Dec2012 $1.60
Dec2011 $1.24
Dec2010 $1.30
Dec2009 $2.04
Dec2008 $3.68
Dec2007 $4.79
Dec2006 $4.79
Dec2005 $4.33
Dec2004 $3.94
Dec2003 $3.78
Dec2002 $3.83
Dec2001 $3.98
Dec2000 $3.87

Recommended Reading:

Other ModernGraham posts about the company

Best Stocks to Invest In: the Bank Industry – August 2016
Comerica Inc Stock Valuation – February 2016 $CMA
7 Best Stocks For Value Investors This Week – 10/24/15
The Best Companies of the Banking Industry – October 2015
Comerica Inc. Valuation – October 2015 Update $CMA

Other ModernGraham posts about related companies

US Bancorp Valuation – August 2016 $USB
Bank of New York Mellon Corp Valuation – August 2016 $BK
Best Stocks to Invest In: the Bank Industry – August 2016
JPMorgan Chase & Co Valuation – July 2016 $JPM
Dominion Resources Inc Valuation – July 2016 $D
M&T Bank Corp Valuation – July 2016 $MTB
Citigroup Inc Valuation – July 2016 $C
Bank of America Corp Valuation – July 2016 $BAC
Fifth Third Bancorp Valuation – July 2016 $FITB
Zions Bancorp Valuation – June 2016 $ZION

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Comerica Inc Stock Valuation – February 2016 $CMA

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Companies Benjamin Graham Would Invest In Today – February 2016.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how Comerica Inc (CMA) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Comerica Incorporated is a financial services company. The Company’s principal activity is lending to and accepting deposits from businesses and individuals. It operates in three business segments: the Business Bank, the Retail Bank and Wealth Management. In addition, it also operates in the Finance segment. The Business Bank segment offers commercial loans and lines of credit, deposits, cash management, capital market products, international trade finance, letters of credit, foreign exchange management services and loan syndication services. The Retail Bank segment offers deposit accounts, installment loans, credit cards, student loans, home equity lines of credit and residential mortgage loans. The Wealth Management segment offers fiduciary services, private banking, retirement services, investment management and advisory services, investment banking and brokerage services. The Finance segment includes its securities portfolio, and asset and liability management activities.

[level-free]

To read the details of this valuation, you must be logged in as a premium member. If you are not a premium member, please consider becoming one.

Premium members can view a full ModernGraham valuation of the company and have access to download a PDF version of the valuation for easy reference. Here is a free sample valuation pdf, and here is a post detailing what can be found within each individual company’s valuation.

[/level-free]
[not-level-free]

Downloadable PDF version of this valuation:

ModernGraham Valuation of CMA

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass all 6 of the following tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $6,174,473,573 Pass
2. Earnings Stability Positive EPS for 10 years prior Fail
3. Dividend Record Dividend Payments for 10 years prior Pass
4. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 80.49% Pass
5. Moderate PEmg Ratio PEmg < 20 11.34 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 0.79 Pass
Score
Enterprising Investor; must pass all 3 of the following tests, or be suitable for the Defensive Investor.
1. Earnings Stability Positive EPS for 5 years prior Pass
2. Dividend Record Currently Pays Dividend Pass
3. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

CMA value chart February 2016

EPSmg $2.90
MG Growth Estimate 12.15%
MG Value $95.18
Opinion Undervalued
MG Grade B
MG Value based on 3% Growth $42.08
MG Value based on 0% Growth $24.67
Market Implied Growth Rate 1.42%
Current Price $32.92
% of Intrinsic Value 34.59%

Comerica Incorporated is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings stability over the last ten years. The Enterprising Investor has no initial concerns.  As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $1.60 in 2012 to an estimated $2.90 for 2016. This level of demonstrated earnings growth does not support the market’s implied estimate of 1.42% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value above the price.  Comerica Incorporated performs fairly well in the ModernGraham grading system, scoring a B.

Stage 3: Information for Further Research

CMA charts February 2016

Graham Number $51.96
PEmg 11.34
PB Ratio 0.79
Dividend Yield 2.52%
Number of Consecutive Years of Dividend Growth 7

[/not-level-free]

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information Dec2015
Long-Term Debt $3,058,000,000
Total Assets $71,895,000,000
Intangible Assets $0
Total Liabilities $64,321,000,000
Shares Outstanding (Diluted Average) 181,104,000

Earnings Per Share History

Next Fiscal Year Estimate $2.80
Dec2015 $2.92
Dec2014 $3.16
Dec2013 $2.85
Dec2012 $2.67
Dec2011 $2.09
Dec2010 $0.88
Dec2009 -$0.79
Dec2008 $1.28
Dec2007 $4.43
Dec2006 $5.49
Dec2005 $5.11
Dec2004 $4.36
Dec2003 $3.75
Dec2002 $3.40
Dec2001 $3.88
Dec2000 $4.31
Dec1999 $4.14
Dec1998 $3.72
Dec1997 $3.19
Dec1996 $2.38

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $2.90
Dec2015 $2.88
Dec2014 $2.68
Dec2013 $2.14
Dec2012 $1.60
Dec2011 $1.24
Dec2010 $1.30
Dec2009 $2.04
Dec2008 $3.68
Dec2007 $4.79
Dec2006 $4.79
Dec2005 $4.33
Dec2004 $3.94
Dec2003 $3.78
Dec2002 $3.83
Dec2001 $3.98
Dec2000 $3.87

Recommended Reading:

Other ModernGraham posts about the company

7 Best Stocks For Value Investors This Week – 10/24/15
The 16 Best Stocks For Value Investors This Week – 8/1/15
Comerica Incorporated Analysis – July 2015 Update $CMA
27 Companies in the Spotlight This Week – 4/4/15
Comerica Inc. Quarterly Valuation – April 2015 $CMA

Other ModernGraham posts about related companies

U.S. Bancorp Valuation – February 2016 $USB
JP Morgan Chase Valuation – January 2016 Update $JPM
Bank of New York Mellon Valuation – January 2016 Update $BK
Fifth Third Bancorp Valuation – January 2016 Update $FITB
Huntington Bancshares Valuation – January 2016 Update $HBAN
Wells Fargo & Co Valuation – December 2015 Update $WFC
Citigroup Inc Valuation – December 2015 Update $C
People’s United Financial Corp Valuation – December 2015 Update $PBCT
M&T Bank Corp Valuation – December 2015 Update $MTB
KeyCorp Valuation – November 2015 Update $KEY

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Comerica Inc. Valuation – October 2015 Update $CMA

In the wake of the great financial crisis it can sometimes be difficult for Intelligent Investors to find a solid financial company in which to invest, because they require specific achievements over the historical period.  Many investors may simply decide to throw out the worst years with the rationale that they are outliers that shouldn’t be considered when evaluating the company’s prospects, but doing so would involve speculation.

We don’t know whether the financial crisis will happen again, but we do know that if it does, we can expect to see similar results as we did before.  By continuing to require the same standards for the historical period, Intelligent Investors are able to whittle down banks to only those with the best financial position, and then they are able to determine an intrinsic value to get a sense of whether the company is a good investment.

In addition, a company must have strong financial statements to prove that it is stable enough for Intelligent Investors.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.

What follows is a specific look at how Comerica Inc. (CMA) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Comerica Incorporated is a financial services company. The Company’s principal activity is lending to and accepting deposits from businesses and individuals. It operates in three business segments: the Business Bank, the Retail Bank and Wealth Management. In addition, it also operates in the Finance segment. The Business Bank segment offers commercial loans and lines of credit, deposits, cash management, capital market products, international trade finance, letters of credit, foreign exchange management services and loan syndication services. The Retail Bank segment offers deposit accounts, installment loans, credit cards, student loans, home equity lines of credit and residential mortgage loans. The Wealth Management segment offers fiduciary services, private banking, retirement services, investment management and advisory services, investment banking and brokerage services. The Finance segment includes its securities portfolio, and asset and liability management activities.
[level-free]

To read the rest of this valuation, you must be logged in as a premium member. If you are not a premium member, please consider becoming one.

Premium members can view a full ModernGraham valuation of the company and have access to download a PDF version of the valuation for easy reference. Here is a free sample valuation pdf, and here is a post detailing what can be found within each individual company’s valuation.

[/level-free]
[level-mg-stocks-screens-subscriber]

Downloadable PDF version of this valuation:

ModernGraham Valuation of CMA – October 2015

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass all 6 of the following tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $7,624,401,952 Pass
2. Earnings Stability Positive EPS for 10 years prior Fail
3. Dividend Record Dividend Payments for 10 years prior Pass
4. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end -27.86% Fail
5. Moderate PEmg Ratio PEmg < 20 16.37 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.00 Pass
Score
Enterprising Investor; must pass all 3 of the following tests, or be suitable for the Defensive Investor.
1. Earnings Stability Positive EPS for 5 years prior Pass
2. Dividend Record Currently Pays Dividend Pass
3. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

CMA value Chart October 2015

EPSmg $2.60
MG Growth Estimate 15.00%
MG Value $100.02
Opinion Undervalued
MG Value based on 3% Growth $37.67
MG Value based on 0% Growth $22.08
Market Implied Growth Rate 3.94%
Current Price $42.54
% of Intrinsic Value 42.53%

Comerica Inc. qualifies for the Enterprising Investor but not the more conservative Defensive Investor.  The Defensive Investor has concerns regarding the insufficient earnings stability or growth over the last ten years while the Enterprising Investor has no initial concerns.  As a result, all Enterprising Investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with the next stage of the analysis.

As for a valuation, the company appears to be undervalued after growing its EPSmg (normalized earnings) from $1.24 in 2011 to an estimated $2.60 for 2015.  This level of demonstrated earnings growth outpaces the market’s implied estimate of 3.94% annual earnings growth over the next 7-10 years.  As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value above the price.

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on Comerica Inc. (CMA)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Stage 3: Information for Further Research

CMA Charts October 2015

Graham Number $44.67
PEmg 16.37
PB Ratio 1.00
Dividend Yield 1.90%
Number of Consecutive Years of Dividend Growth 6

 

[/level-mg-stocks-screens-subscriber]

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Long-Term Debt $3,100,000,000
Total Assets $71,012,000,000
Intangible Assets $0
Total Liabilities $63,390,000,000
Shares Outstanding (Diluted Average) 178,360,000

Earnings Per Share History

Next Fiscal Year Estimate $2.07
Dec14 $3.16
Dec13 $2.85
Dec12 $2.67
Dec11 $2.09
Dec10 $0.88
Dec09 -$0.79
Dec08 $1.28
Dec07 $4.43
Dec06 $5.49
Dec05 $5.11
Dec04 $4.36
Dec03 $3.75
Dec02 $3.40
Dec01 $3.88
Dec00 $4.31
Dec99 $4.14
Dec98 $3.72
Dec97 $3.19
Dec96 $2.38
Dec95 $2.37

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $2.60
Dec14 $2.68
Dec13 $2.14
Dec12 $1.60
Dec11 $1.24
Dec10 $1.30
Dec09 $2.04
Dec08 $3.68
Dec07 $4.79
Dec06 $4.79
Dec05 $4.33
Dec04 $3.94
Dec03 $3.78
Dec02 $3.83
Dec01 $3.98
Dec00 $3.87
Dec99 $3.49

Recommended Reading:

Other ModernGraham posts about the company

The 16 Best Stocks For Value Investors This Week – 8/1/15
Comerica Incorporated Analysis – July 2015 Update $CMA
27 Companies in the Spotlight This Week – 4/4/15
Comerica Inc. Quarterly Valuation – April 2015 $CMA
5 Undervalued Companies for the Enterprising Investor Near 52 Week Lows – January 2015

Other ModernGraham posts about related companies

Bank of New York Mellon Corporation Analysis – October 2015 Update $BK
Fifth Third Bancorp Analysis – October 2015 Update $FITB
Huntington Bancshares Inc. Analysis – October 2015 Update $HBAN
JPMorgan Chase & Co. Analysis – September 2015 Update $JPM
Citigroup Inc. Analysis – September 2015 Update $C
Wells Fargo & Co. Analysis – September 2015 Update $WFC
People’s United Financial Inc. Analysis – August 2015 Update $PBCT
M&T Bank Corporation Analysis – August 2015 Update $MTB
KeyCorp Analysis – August 2015 Update $KEY
State Street Corporation Analysis – August 2015 Update $STT

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please review our detailed disclaimer.

Comerica Incorporated Analysis – July 2015 Update $CMA

ComericaIn the wake of the great financial crisis it can sometimes be difficult for Intelligent Investors to find a solid financial company in which to invest, because they require specific achievements over the historical period.  Many investors may simply decide to throw out the worst years with the rationale that they are outliers that shouldn’t be considered when evaluating the company’s prospects, but doing so would involve speculation.  We don’t know whether the financial crisis will happen again, but we do know that if it does, we can expect to see similar results as we did before.  By continuing to require the same standards for the historical period, Intelligent Investors are able to whittle down banks to only those with the best financial position, and then they are able to determine an intrinsic value to get a sense of whether the company is a good investment.  In addition, a company must have strong financial statements to prove that it is stable enough for Intelligent Investors.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a specific look at how Comerica Inc. (CMA) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Comerica Incorporated is a financial services company. The Company’s principal activity is lending to and accepting deposits from businesses and individuals. It operates in three business segments: the Business Bank, the Retail Bank and Wealth Management. In addition, it also operates in the Finance segment. The Business Bank segment offers commercial loans and lines of credit, deposits, cash management, capital market products, international trade finance, letters of credit, foreign exchange management services and loan syndication services. The Retail Bank segment offers deposit accounts, installment loans, credit cards, student loans, home equity lines of credit and residential mortgage loans. The Wealth Management segment offers fiduciary services, private banking, retirement services, investment management and advisory services, investment banking and brokerage services. The Finance segment includes its securities portfolio, and asset and liability management activities.

Defensive Investor – must pass all 6 of the following tests: Score = 4/6

  1. Adequate Size of Enterprise – market capitalization of at least $2 billion – PASS
  2. Earnings Stability – positive earnings per share for at least 10 straight years – FAIL
  3. Dividend Record – has paid a dividend for at least 10 straight years – PASS
  4. Earnings Growth – earnings per share has increased by at least 1/3 over the last 10 years using 3 year averages at beginning and end of period – FAIL
  5. Moderate PEmg ratio – PEmg is less than 20 – PASS
  6. Moderate Price to Assets – PB ratio is less than 2.5 or PB x PEmg is less than 50 – PASS

Enterprising Investor – must pass all 3 of the following tests or be suitable for a defensive investor: Score = 3/3

  1. Earnings Stability – positive earnings per share for at least 5 years – PASS
  2. Dividend Record – currently pays a dividend – PASS
  3. Earnings growth – EPSmg greater than 5 years ago – PASS

Valuation Summary

Key Data:

Recent Price $47.85
MG Value $108.36
MG Opinion Undervalued
Value Based on 3% Growth $40.81
Value Based on 0% Growth $23.92
Market Implied Growth Rate 4.25%
PEmg 17.00
PB Ratio 1.16

Balance Sheet – March 2015

Total Debt $2,686,000,000
Total Assets $69,336,000,000
Intangible Assets $635,000,000
Total Liabilities $61,836,000,000
Outstanding Shares 182,000,000

Earnings Per Share

2015 (estimate) $2.72
2014 $3.16
2013 $2.85
2012 $2.67
2011 $2.09
2010 $0.88
2009 -$0.79
2008 $1.28
2007 $4.43
2006 $5.49
2005 $5.11

Earnings Per Share – ModernGraham 

2015 (estimate) $2.81
2014 $2.68
2013 $2.14
2012 $1.60
2011 $1.24
2010 $1.30

Dividend History

Free Cash Flow

Conclusion

Comerica Inc. qualifies for the Enterprising Investor but not the Defensive Investor.  The Defensive Investor is concerned by the insufficient earnings growth or stability over the last ten years, while the company passes all of the Enterprising Investor’s requirements.  As a result, Enterprising Investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with further research into the company and comparing it to other opportunities.  As for a valuation, the company appears undervalued after growing its EPSmg (normalized earnings) from $1.24 in 2011 to an estimated $2.81 for 2015.  This level of demonstrated growth is greater than the market’s implied estimate of 4.25% earnings growth and leads the ModernGraham valuation model, which is based on Benjamin Graham’s formula, to return an estimate of intrinsic value above the market price.

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on Comerica Inc. (CMA)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Disclaimer:  The author did not hold a position in any of the companies listed in this article at the time of publication and had no intention of changing that position within the next 72 hours.  Logo taken from the Wikipedia; this article is not affiliated with the company in any manner.

Comerica Inc. Quarterly Valuation – April 2015 $CMA

ComericaIn the wake of the great financial crisis it can sometimes be difficult for Intelligent Investors to find a solid financial company in which to invest, because they require specific achievements over the historical period.  Many investors may simply decide to throw out the worst years with the rationale that they are outliers that shouldn’t be considered when evaluating the company’s prospects, but doing so would involve speculation.  We don’t know whether the financial crisis will happen again, but we do know that if it does, we can expect to see similar results as we did before.  By continuing to require the same standards for the historical period, Intelligent Investors are able to whittle down banks to only those with the best financial position, and then they are able to determine an intrinsic value to get a sense of whether the company is a good investment.  In addition, a company must have strong financial statements to prove that it is stable enough for Intelligent Investors.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a specific look at how Comerica Inc. (CMA) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Comerica Incorporated (Comerica) is a financial services company. Comerica has strategically aligned its operations into three business segments: the Business Bank, the Retail Bank and Wealth Management. The Business Bank meets the needs of middle market businesses, multinational corporations and governmental entities by offering various products and services, including commercial loans and lines of credit, deposits, cash management, capital market products, international trade finance, letters of credit, foreign exchange management services and loan syndication services. The Retail Bank includes small business banking and personal financial services, consisting of consumer lending, consumer deposit gathering and mortgage loan origination. It also offers a variety of consumer products, including deposit accounts, installment loans, credit cards, student loans, home equity lines of credit and residential mortgage loans.

FITB data by YCharts

Defensive Investor – must pass all 6 of the following tests: Score = 4/6

  1. Adequate Size of Enterprise – market capitalization of at least $2 billion – PASS
  2. Earnings Stability – positive earnings per share for at least 10 straight years – FAIL
  3. Dividend Record – has paid a dividend for at least 10 straight years – PASS
  4. Earnings Growth – earnings per share has increased by at least 1/3 over the last 10 years using 3 year averages at beginning and end of period – FAIL
  5. Moderate PEmg ratio – PEmg is less than 20 – PASS
  6. Moderate Price to Assets – PB ratio is less than 2.5 or PB x PEmg is less than 50 – PASS

Enterprising Investor – must pass all 3 of the following tests or be suitable for a defensive investor: Score = 3/3

  1. Earnings Stability – positive earnings per share for at least 5 years – PASS
  2. Dividend Record – currently pays a dividend – PASS
  3. Earnings growth – EPSmg greater than 5 years ago – PASS

Valuation Summary

Key Data:

Recent Price $44.64
MG Value $103.36
MG Opinion Undervalued
Value Based on 3% Growth $38.93
Value Based on 0% Growth $22.82
Market Implied Growth Rate 4.06%
PEmg 16.63
PB Ratio 1.10

Balance Sheet – December 2014

Total Debt $2,679,000,000
Total Assets $69,190,000,000
Intangible Assets $648,000,000
Total Liabilities $61,788,000,000
Outstanding Shares 182,000,000

Earnings Per Share

2014 $3.16
2013 $2.85
2012 $2.67
2011 $2.09
2010 $0.88
2009 -$0.79
2008 $1.28
2007 $4.43
2006 $5.49
2005 $5.11
2004 $4.36

Earnings Per Share – ModernGraham 

2014 $2.68
2013 $2.14
2012 $1.60
2011 $1.24
2010 $1.30
2009 $2.04

Dividend History

Conclusion

Comerica Inc. qualifies for the Enterprising Investor but not the Defensive Investor.  The Defensive Investor is concerned by the lack of earnings stability or growth over the last ten years, while the company passes all of the Enterprising Investor’s requirements.  As a result, Enterprising Investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with further research into the company and comparing it to other opportunities.  As for a valuation, the company appears undervalued after growing its EPSmg (normalized earnings) from $1.30 in 2010 to $2.68 for 2014.  This level of demonstrated growth outpaces the market’s implied estimate of 4.06% earnings growth and leads the ModernGraham valuation model, which is based on Benjamin Graham’s formula, to return an estimate of intrinsic value above the market price.

Be sure to check out previous ModernGraham valuations of Comerica Inc. (CMA) for greater perspective!

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on Comerica Inc. (CMA)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Disclaimer:  The author did not hold a position in Comerica Inc. (CMA) or in any of the other companies listed in this article at the time of publication and had no intention of changing that position within the next 72 hours.  Logo taken from the Wikipedia; this article is not affiliated with the company in any manner.

Comerica Incorporated Quarterly Valuation – January 2015 $CMA

ComericaIn the wake of the great financial crisis it can sometimes be difficult for Intelligent Investors to find a solid financial company in which to invest, because they require specific achievements over the historical period.  Many investors may simply decide to throw out the worst years with the rationale that they are outliers that shouldn’t be considered when evaluating the company’s prospects, but doing so would involve speculation.  We don’t know whether the financial crisis will happen again, but we do know that if it does, we can expect to see similar results as we did before.  By continuing to require the same standards for the historical period, Intelligent Investors are able to whittle down banks to only those with the best financial position, and then they are able to determine an intrinsic value to get a sense of whether the company is a good investment.  In addition, a company must have strong financial statements to prove that it is stable enough for Intelligent Investors.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a specific look at how Comerica Inc. (CMA) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Comerica Incorporated (Comerica) is a financial services company. The Company has three business segments: the Business Bank, the Retail Bank, and Wealth Management. Comerica operates in three primary geographic markets: Texas, California and Michigan. The Company’s business bank meets the needs of middle market businesses, multinational corporations and governmental entities by offering various products and services, including commercial loans and lines of credit, deposits, cash management, capital market products, international trade finance, letters of credit, foreign exchange management services and loan syndication services. As of December 31, 2012, Comerica owned directly or indirectly all the stock of two active banking and 49 non-banking subsidiaries.

Defensive Investor – must pass all 6 of the following tests: Score = 4/6

  1. Adequate Size of Enterprise – market capitalization of at least $2 billion – PASS
  2. Earnings Stability – positive earnings per share for at least 10 straight years – FAIL
  3. Dividend Record – has paid a dividend for at least 10 straight years – PASS
  4. Earnings Growth – earnings per share has increased by at least 1/3 over the last 10 years using 3 year averages at beginning and end of period – FAIL
  5. Moderate PEmg ratio – PEmg is less than 20 – PASS
  6. Moderate Price to Assets – PB ratio is less than 2.5 or PB x PEmg is less than 50 – PASS

Enterprising Investor – must pass all 3 of the following tests or be suitable for a defensive investor: Score = 3/3

  1. Earnings Stability – positive earnings per share for at least 5 years – PASS
  2. Dividend Record – currently pays a dividend – PASS
  3. Earnings growth – EPSmg greater than 5 years ago – PASS

Valuation Summary

Key Data:

Recent Price $46.29
MG Value $102.08
MG Opinion Undervalued
Value Based on 3% Growth $38.44
Value Based on 0% Growth $22.54
Market Implied Growth Rate 4.48%
PEmg 17.46
PB Ratio 1.15

Balance Sheet – September 2014

Total Debt $2,669,000,000
Total Assets $68,887,000,000
Intangible Assets $0
Total Liabilities $61,454,000,000
Outstanding Shares 185,000,000

Earnings Per Share

2014 (estimate) $3.06
2013 $2.85
2012 $2.67
2011 $2.09
2010 $0.88
2009 -$0.79
2008 $1.28
2007 $4.43
2006 $5.49
2005 $5.11
2004 $4.36

Earnings Per Share – ModernGraham 

2014 (estimate) $2.65
2013 $2.14
2012 $1.60
2011 $1.24
2010 $1.30
2009 $2.04

Dividend History

Conclusion:

Comerica Inc. qualifies for the Enterprising Investor but not the Defensive Investor.  The Defensive Investor is concerned by the lack of earnings stability or growth over the last ten years, while the company passes all of the Enterprising Investor’s requirements.  As a result, Enterprising Investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with further research into the company and comparing it to other opportunities.  As for a valuation, the company appears undervalued after growing its EPSmg (normalized earnings) from $1.30 in 2010 to an estimated $2.65 for 2014.  This level of demonstrated growth outpaces the market’s implied estimate of 4.48% earnings growth and leads the ModernGraham valuation model, which is based on Benjamin Graham’s formula, to return an estimate of intrinsic value above the market price.

Be sure to check out previous ModernGraham valuations of Comerica Inc. (CMA) for greater perspective!

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on Comerica Inc. (CMA)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Disclaimer:  The author did not hold a position in Comerica Inc. (CMA) or in any of the other companies listed in this article at the time of publication and had no intention of changing that position within the next 72 hours.  Logo taken from the Wikipedia; this article is not affiliated with the company in any manner.

Comerica Incorporated Quarterly Stock Valuation – September 2014 $CMA

ComericaIn the wake of the great financial crisis it can sometimes be difficult for Intelligent Investors to find a solid financial company in which to invest, because they require specific achievements over the historical period.  Many investors may simply decide to throw out the worst years with the rationale that they are outliers that shouldn’t be considered when evaluating the company’s prospects, but doing so would involve speculation.  We don’t know whether the financial crisis will happen again, but we do know that if it does, we can expect to see similar results as we did before.  By continuing to require the same standards for the historical period, Intelligent Investors are able to whittle down banks to only those with the best financial position, and then they are able to determine an intrinsic value to get a sense of whether the company is a good investment.  In addition, a company must have strong financial statements to prove that it is stable enough for Intelligent Investors.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a specific look at how Comerica Inc. (CMA) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Comerica Incorporated (Comerica) is a financial services company. The Company has three business segments: the Business Bank, the Retail Bank, and Wealth Management. Comerica operates in three primary geographic markets: Texas, California and Michigan. The Company’s business bank meets the needs of middle market businesses, multinational corporations and governmental entities by offering various products and services, including commercial loans and lines of credit, deposits, cash management, capital market products, international trade finance, letters of credit, foreign exchange management services and loan syndication services. As of December 31, 2012, Comerica owned directly or indirectly all the stock of two active banking and 49 non-banking subsidiaries.
CMA Chart

CMA data by YCharts

Defensive Investor – must pass all 6 of the following tests: Score = 4/6

  1. Adequate Size of Enterprise – market capitalization of at least $2 billion – PASS
  2. Earnings Stability – positive earnings per share for at least 10 straight years – FAIL
  3. Dividend Record – has paid a dividend for at least 10 straight years – PASS
  4. Earnings Growth – earnings per share has increased by at least 1/3 over the last 10 years using 3 year averages at beginning and end of period – FAIL
  5. Moderate PEmg ratio – PEmg is less than 20 – PASS
  6. Moderate Price to Assets – PB ratio is less than 2.5 or PB x PEmg is less than 50 – PASS

Enterprising Investor – must pass all 3 of the following tests or be suitable for a defensive investor: Score = 3/3

  1. Earnings Stability – positive earnings per share for at least 5 years – PASS
  2. Dividend Record – currently pays a dividend – PASS
  3. Earnings growth – EPSmg greater than 5 years ago – PASS

Valuation Summary

Key Data:

Recent Price $51.53
MG Value $100.95
MG Opinion Undervalued
Value Based on 3% Growth $38.02
Value Based on 0% Growth $22.29
Market Implied Growth Rate 5.58%
PEmg 19.65
PB Ratio 1.27

Balance Sheet – 6/30/2014

Total Debt $2,620,000,000
Total Assets $65,325,000,000
Intangible Assets $650,000,000
Total Liabilities $57,956,000,000
Outstanding Shares 180,970,000

Earnings Per Share

2014 (estimate) $2.99
2013 $2.85
2012 $2.67
2011 $2.09
2010 $0.79
2009 -$0.80
2008 $1.29
2007 $4.40
2006 $4.81
2005 $5.11
2004 $4.36

Earnings Per Share – ModernGraham 

2014 (estimate) $2.62
2013 $2.13
2012 $1.58
2011 $1.21
2010 $1.22
2009 $1.94

Dividend History

CMA Dividend Chart

CMA Dividend data by YCharts

Conclusion:

Comerica qualifies for the Enterprising Investor but not the Defensive Investor.  The Defensive Investor is concerned by the lack of earnings stability or growth over the last ten years while the company passes all of the Enterprising Investor’s requirements.  As a result, Enterprising Investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with further research into the company and comparing it to other opportunities.  As for a valuation, the company appears undervalued after growing its EPSmg (normalized earnings) from $1.22 in 2010 to an estimated $2.62 for 2014.  This level of demonstrated growth outpaces the market’s implied estimate of 5.58% earnings growth and leads the ModernGraham valuation model, which is based on Benjamin Graham’s formula, to return an estimate of intrinsic value above the market price.

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on Comerica (CMA)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Disclaimer:  The author did not hold a position in Comerica (CMA) or in any of the other companies listed in this article at the time of publication and had no intention of changing that position within the next 72 hours.  Logo taken from the Wikipedia; this article is not affiliated with the company in any manner.

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