Contrasting Commerce Bancshares (NASDAQ:CBSH) and NU (NYSE:NU)

NU (NYSE:NU) and Commerce Bancshares (NASDAQ:CBSH) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, profitability, risk, analyst recommendations, valuation, earnings and institutional ownership.

Valuation and Earnings

This table compares NU and Commerce Bancshares”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NU	$15.77 billion	4.25	$2.87 billion	$0.74	18.65
Commerce Bancshares	$2.14 billion	3.85	$566.25 million	$4.13	13.87

NU has higher revenue and earnings than Commerce Bancshares. Commerce Bancshares is trading at a lower price-to-earnings ratio than NU, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

NU has a beta of 0.94, meaning that its share price is 6% less volatile than the S&P 500. Comparatively, Commerce Bancshares has a beta of 0.58, meaning that its share price is 42% less volatile than the S&P 500.

Institutional and Insider Ownership

84.0% of NU shares are held by institutional investors. Comparatively, 70.3% of Commerce Bancshares shares are held by institutional investors. 1.2% of NU shares are held by company insiders. Comparatively, 1.8% of Commerce Bancshares shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares NU and Commerce Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NU	18.65%	31.59%	4.97%
Commerce Bancshares	26.07%	14.31%	1.71%

Analyst Ratings

This is a breakdown of current ratings for NU and Commerce Bancshares, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NU	1	5	8	0	2.50
Commerce Bancshares	0	7	3	0	2.30

NU currently has a consensus price target of $17.92, suggesting a potential upside of 29.84%. Commerce Bancshares has a consensus price target of $64.86, suggesting a potential upside of 13.23%. Given NU’s stronger consensus rating and higher probable upside, analysts plainly believe NU is more favorable than Commerce Bancshares.

Summary

NU beats Commerce Bancshares on 11 of the 14 factors compared between the two stocks.

About NU

Nu Holdings Ltd. is a holding company, which engages in the provision of digital banking services. The company was founded by David Vélez Osorno, Cristina Helena Zingaretti Junqueira, and Adam Edward Wible on February 26, 2016 and is headquartered in George Town, Cayman Islands.

About Commerce Bancshares

Commerce Bancshares, Inc. operates as the bank holding company for Commerce Bank that provides retail, mortgage banking, corporate, investment, trust, and asset management products and services to individuals and businesses in the United States. It operates through three segments: Consumer, Commercial, and Wealth. The Consumer segment offers various banking products and services, including consumer deposits; consumer loans, such as automobile, motorcycle, marine, tractor/trailer, recreational vehicle, fixed rate and revolving home equity, and other consumer loans; patient health care financing; real estate loans; indirect and other consumer financing; retail branch network; personal mortgage banking; consumer installment lending; and consumer debit and credit bank cards. The Commercial segment provides corporate lending, leasing, international, merchant and commercial bank card, and securities safekeeping and bond accounting services; and business products, government deposits, and related commercial cash management services, as well as sells fixed income securities to correspondent banks, corporations, public institutions, municipalities, and individuals. The Wealth segment provides traditional trust and estate planning, advisory and discretionary investment portfolio management, and brokerage services, as well as private banking accounts. The company also offers private equity investment, securities brokerage, insurance agency, specialty lending, and leasing services, as well as online and mobile banking services. Commerce Bancshares, Inc. was founded in 1865 and is headquartered in Kansas City, Missouri.