Critical Comparison: Canadian Imperial Bank of Commerce (NYSE:CM) vs. China Construction Bank (OTCMKTS:CICHY)

China Construction Bank (OTCMKTS:CICHY) and Canadian Imperial Bank of Commerce (NYSE:CM) are both large-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, dividends, profitability, valuation, earnings, risk and institutional ownership.

Dividends

China Construction Bank pays an annual dividend of $0.80 per share and has a dividend yield of 3.9%. Canadian Imperial Bank of Commerce pays an annual dividend of $3.06 per share and has a dividend yield of 3.2%. China Construction Bank pays out 22.2% of its earnings in the form of a dividend. Canadian Imperial Bank of Commerce pays out 50.2% 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 raised its dividend for 14 consecutive years. China Construction Bank is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider and Institutional Ownership

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

Earnings and Valuation

This table compares China Construction Bank and Canadian Imperial Bank of Commerce”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
China Construction Bank	$188.88 billion	1.42	$46.68 billion	$3.60	5.69
Canadian Imperial Bank of Commerce	$44.36 billion	2.00	$6.02 billion	$6.09	15.73

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

Analyst Recommendations

This is a breakdown of current ratings and target prices for China Construction Bank and Canadian Imperial Bank of Commerce, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
China Construction Bank	0	1	0	0	2.00
Canadian Imperial Bank of Commerce	0	4	4	0	2.50

Canadian Imperial Bank of Commerce has a consensus target price of $107.50, indicating a potential upside of 12.24%. 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 China Construction Bank.

Risk & Volatility

China Construction Bank has a beta of 0.13, suggesting that its share price is 87% less volatile than the S&P 500. Comparatively, Canadian Imperial Bank of Commerce has a beta of 1.02, suggesting that its share price is 2% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
China Construction Bank	25.63%	9.81%	0.78%
Canadian Imperial Bank of Commerce	13.57%	14.93%	0.77%

Summary

Canadian Imperial Bank of Commerce beats China Construction Bank on 10 of the 16 factors compared between the two stocks.

About China Construction Bank

China Construction Bank Corporation provides various banking and related financial services to individuals and corporate customers in the People's Republic of China and internationally. It operates through Corporate Finance Business, Personal Finance Business, Treasury and Asset Management Business, and Others segments. The company accepts various deposits, such as foreign currency, all in one accounts, RMB, corporate term and notification, and corporate demand deposits, as well corporate deposits by agreement. Its loan products include personal business, car, and housing loans; and SME, traditional credit, commercial draft, buyer credit, and RMB credit line loans. The company also offers credit cards; physical gold for personal investment and personal gold accounts; foreign exchange services; certificate treasury and savings bonds, securities deposit accounts, and securities services, as well as bank-securities transfer and book-entry treasury bond over the counter transaction services; and wealth management products. In addition, it provides collection, salaries payment, third-party collection and payment, insurance agency, and remittance services; international settlement and financing, and FI services; securities and fund settlement services; guarantee-based, consulting and advising, and factoring services; fund custody services; and e-banking services. Further, the company offers institutional services comprising services for government agencies, social security, banks cooperation, bank-securities cooperation, bank-insurance cooperation, and services for non-banking financial institutions. China Construction Bank Corporation was founded in 1954 and is headquartered in Beijing, the People's Republic of China.

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.