Comerica, a leading player in the Financial Services sector, has shown promising signs of sustainable growth. The company, traded on the NYSE, boasts a robust total stockholder equity of $5.2B and an impressive net interest income of $2.5B. Despite a loss of $376M in dividends paid, Comerica has managed to maintain a forward dividend yield of 0.0676, which is mirrored in its dividend yield. The company's retained earnings stand at a strong $11.3B, demonstrating its potential for future growth. However, investors should note the company's short long term debt total of $6.2B and a total cash from financing activities loss of $7.1B. Despite these challenges, Comerica's end period cash flow of $6.3B and short term investments of $19.2B indicate a healthy financial position. With 20 analyst estimates, 6 holds, and only 1 strong sell, Comerica appears to be a smart investment for sustainable growth. Comerica is set to announce its earnings today, with the subsequent financial report anticipated on January 18, 2024. Currently, Comerica's Net Income Per Employee is projected to see a significant increase, based on the trends observed in the past few years of reporting. The Average Assets for the current year are expected to grow to approximately $88.3 billion, while the Revenue Per Employee is predicted to decrease to around $409.1 thousand. Given the widespread interest in the banking sector, it's worth considering Comerica as a unique investment alternative.
The company, Comerica, currently holds $6.24 billion in debt, with a debt to equity (D/E) ratio of 8.51. This suggests that Comerica might struggle to generate sufficient cash to meet all of its financial obligations. While debt can be beneficial for Comerica in the short term, problems could arise if the company struggles to repay it, either through new capital or free cash flow. In such a scenario, Comerica's shareholders could potentially end up with nothing if the company fails to meet its legal obligations to repay its debt. However, a more common scenario is when companies like Comerica issue additional shares at discounted prices, thereby diluting the value of existing shares. Despite these risks, debt can be an excellent tool for Comerica to invest in growth at high rates of return. When evaluating Comerica's use of debt, it's essential to consider it in conjunction with cash and equity.
Progressive assessment
Comerica's financial leverage indicates a strong position with a Total Stockholder Equity of 5.2B and Net Tangible Assets of 4.8B. The company's healthy End Period Cash Flow of 6.3B provides further assurance of its financial stability. However, investors should be aware of Comerica's significant Non Current Liabilities Total of 77B and Short Term Debt of 3.2B. Despite these liabilities, Comerica's strong Operating Income of 1.7B and Net Income From Continuing Ops of 1.2B suggest that the company is capable of managing its debts while still providing a promising return on investment. To perform a cash flow analysis of Comerica, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Comerica is receiving and how much cash it distributes out in a given period. The Comerica cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.
The firm reported the last year's revenue of 3.53
B. Total Income to common stockholders was 1.15
B with profit before taxes, overhead, and interest of 3.47
B. Comerica Incorporated (NYSE: CMA) is a financial services company that has shown promising performance and growth, despite the volatility of the banking sector. With a net income of
$1.15 billion and EBITDA of $1.77 billion, the company demonstrates strong earning potential. It also boasts a substantial end period cash flow of
$6.3 billion, indicating a robust liquidity position. Comerica's total assets stand at $85.4 billion, including $4.8 billion in net tangible assets. Its total debt is relatively manageable at $6.24 billion, considering its strong cash flow and asset base.
The company's net interest income of $2.5 billion further underlines its profitable operations. The bank's forward dividend rate of 2.84 and a yield of 0.0676 demonstrate its commitment to returning value to shareholders. However, investors should consider the company's beta of 1.27, suggesting higher volatility compared to the market. Despite these promising figures, Comerica has a relatively high probability of bankruptcy at 45.63%. This risk factor, coupled with a negative Treynor Ratio of -0.17 and a Jensen Alpha of -0.15, indicates potential downside risks. In conclusion, while Comerica presents a compelling investment case based on its earnings and
dividends, investors must carefully consider the associated risks. .
Is Comerica getting off balance?
The current standard deviation of Comerica, a measure of volatility, has risen to over 2.17, indicating an increased level of risk associated with the stock. This surge in volatility suggests that Comerica's share price is undergoing larger than usual fluctuations, which could potentially result in significant capital losses for investors if the price moves unfavorably. Consequently, investors should exercise caution and closely monitor the stock to ensure their investment portfolio remains balanced and not excessively exposed to this heightened risk. Comerica displays very low volatility with a skewness of 0.18 and a kurtosis of 0.18. However, we recommend investors to further examine Comerica's technical indicators to ensure all market information is available and reliable. Understanding different
market volatility trends often assists investors in timing the market. Proper utilization of volatility indicators allows traders to measure Comerica's stock risk against market volatility during both bullish and bearish trends. The increased level of volatility that accompanies bear markets can directly impact
Comerica's stock price, adding stress to investors as they watch the value of their shares plummet.
This typically compels investors to rebalance their portfolios by purchasing different stocks as prices decline. In conclusion, Comerica's stock presents a mixed bag for investors. With an estimated value of
$57.45 by analysts, there is a potential upside to the current market valuation of
$39.26. However, the possible downside price of $41.95 and the naive expected forecast value of $44.06 suggest a degree of caution. The overall
analyst consensus is a 'Buy', with 11 strong buys, 2 buys, and 6 holds. Yet, there is also 1 strong sell recommendation. The EPS estimate for the next fiscal year ending in December is $6.06, indicating potential profitability. Therefore, while Comerica's stock has potential for growth, investors should be mindful of the risks and
make informed decisions based on their risk tolerance and investment objectives. .
Aina Ster is a Member of Macroaxis Editorial Board. Aina delivers weekly perspective on ongoing market and economic trends, analysis and tips from predictive analysis to forecasting across various financial instruments.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Aina Ster do not own shares of Comerica. Please refer to our
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