Bank OZK (NASDAQ:OZK) & Canadian Imperial Bank of Commerce (NYSE:CM) Critical Review

Bank OZK (NASDAQ:OZK) and Canadian Imperial Bank of Commerce (NYSE:CM) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, profitability, earnings and valuation.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Bank OZK and Canadian Imperial Bank of Commerce, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bank OZK	3	5	3	0	2.00
Canadian Imperial Bank of Commerce	0	5	4	1	2.60

Bank OZK currently has a consensus price target of $55.43, indicating a potential upside of 20.26%. Canadian Imperial Bank of Commerce has a consensus price target of $167.00, indicating a potential upside of 49.82%. Given Canadian Imperial Bank of Commerce’s stronger consensus rating and higher possible upside, analysts clearly believe Canadian Imperial Bank of Commerce is more favorable than Bank OZK.

Volatility and Risk

Bank OZK has a beta of 0.88, suggesting that its share price is 12% less volatile than the S&P 500. Comparatively, Canadian Imperial Bank of Commerce has a beta of 1.01, suggesting that its share price is 1% more volatile than the S&P 500.

Profitability

This table compares Bank OZK and Canadian Imperial Bank of Commerce’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bank OZK	24.95%	11.87%	1.67%
Canadian Imperial Bank of Commerce	16.09%	17.02%	0.87%

Insider and Institutional Ownership

86.2% of Bank OZK shares are held by institutional investors. Comparatively, 49.9% of Canadian Imperial Bank of Commerce shares are held by institutional investors. 6.7% of Bank OZK shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

Bank OZK pays an annual dividend of $1.92 per share and has a dividend yield of 4.2%. Canadian Imperial Bank of Commerce pays an annual dividend of $3.10 per share and has a dividend yield of 2.8%. Bank OZK pays out 31.7% of its earnings in the form of a dividend. Canadian Imperial Bank of Commerce pays out 41.4% 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. Bank OZK has raised its dividend for 29 consecutive years and Canadian Imperial Bank of Commerce has raised its dividend for 14 consecutive years. Bank OZK is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Bank OZK 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
Bank OZK	$1.74 billion	2.97	$715.48 million	$6.05	7.62
Canadian Imperial Bank of Commerce	$44.36 billion	2.29	$6.02 billion	$7.49	14.88

Canadian Imperial Bank of Commerce has higher revenue and earnings than Bank OZK. Bank OZK 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.

Summary

Canadian Imperial Bank of Commerce beats Bank OZK on 10 of the 18 factors compared between the two stocks.

About Bank OZK

Bank OZK provides various retail and commercial banking services for individuals and businesses in the United States. The company offers deposit services, including non-interest bearing checking, interest bearing transaction, business sweep, savings, money market, individual retirement, and other accounts, as well as time and reciprocal deposits. It also provides trust and wealth services, such as personal trusts, custodial accounts, investment management accounts, and retirement accounts, as well as corporate trust services, including trustee, paying agent and registered transfer agent services, and other related services. In addition, the company offers treasury management services comprising automated clearing house, wire transfer, transaction reporting, wholesale lockbox, remote deposit capture, automated credit line transfer, reconciliation, positive pay, commercial card, and other services, as well as zero balance and investment sweep accounts. Further, it provides real estate, consumer, small business, indirect recreational vehicle and marine, equipment, agricultural, commercial and industrial, government guaranteed, lines of credit, homebuilder, and affordable housing loans; lender and structured, business aviation, and subscription financing services; and mortgage and other lending products. Additionally, the company offers ATMs; telephone, online, and mobile banking services; credit and debit cards; safe deposit boxes; and other products and services. The company was formerly known as Bank of the Ozarks and changed its name to Bank OZK in July 2018. Bank OZK was founded in 1903 and is headquartered in Little Rock, Arkansas.

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.