Head-To-Head Analysis: Commerce Bancshares (NASDAQ:CBSH) versus Sumitomo Mitsui Trust (OTCMKTS:SUTNY)

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

Analyst Recommendations

This is a summary of recent ratings for Sumitomo Mitsui Trust and Commerce Bancshares, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sumitomo Mitsui Trust	0	1	0	0	2.00
Commerce Bancshares	0	7	3	0	2.30

Commerce Bancshares has a consensus target price of $64.86, suggesting a potential upside of 16.31%. Given Commerce Bancshares’ stronger consensus rating and higher probable upside, analysts clearly believe Commerce Bancshares is more favorable than Sumitomo Mitsui Trust.

Profitability

This table compares Sumitomo Mitsui Trust and Commerce Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sumitomo Mitsui Trust	11.81%	10.45%	0.45%
Commerce Bancshares	26.07%	14.31%	1.71%

Valuation and Earnings

This table compares Sumitomo Mitsui Trust and Commerce Bancshares”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sumitomo Mitsui Trust	$19.82 billion	1.55	$1.99 billion	$0.43	12.81
Commerce Bancshares	$2.14 billion	3.74	$566.25 million	$4.13	13.50

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

Dividends

Sumitomo Mitsui Trust pays an annual dividend of $0.10 per share and has a dividend yield of 1.8%. Commerce Bancshares pays an annual dividend of $1.10 per share and has a dividend yield of 2.0%. Sumitomo Mitsui Trust pays out 23.3% of its earnings in the form of a dividend. Commerce Bancshares pays out 26.6% 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. Commerce Bancshares has increased its dividend for 58 consecutive years. Commerce Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

70.3% of Commerce Bancshares shares are held by institutional investors. 1.8% of Commerce Bancshares shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Commerce Bancshares beats Sumitomo Mitsui Trust on 13 of the 16 factors compared between the two stocks.

About Sumitomo Mitsui Trust

Sumitomo Mitsui Trust Holdings, Inc. operates as a trust bank in Japan and internationally. It offers supervising services for management strategies, and financial and human resource management; and general affairs, business process, corporate administration, operational process, risk, and compliance management services; and internal auditing services. The company also provides real estate brokerage, investment management, and investment advisory services for individual and corporate clients; high-level professional consulting services; loan guarantees and payment collection agency services; issuing credit cards; internet banking; securities administration and credit card services; and advanced financial instruments, such as leasing and credit services, and credit card financing services, as well as mortgage loans and managing private equity funds and related advisory services. In addition, it offers back-office services, such as business management and system administration for stock transfer agencies; clerical works, including managing shareholders registry and special accounts; custody and fund administration services; stock transfer agency services; asset management services; and retail total solution, marketing, and fiduciary services, as well as system development and maintenance. Further, the company provides facilities management, clerical work outsourcing, and leasing of buildings; consulting services related to digital transformation, data-analytics, and a range of research and studies; and evaluation of mutual funds, discretionary investment funds, and insurance products, as well as engages in trustee and temporary staffing businesses. The company was formerly known as Chuo Mitsui Trust Holdings, Inc. and changed its name to Sumitomo Mitsui Trust Holdings, Inc. in 2011. Sumitomo Mitsui Trust Holdings, Inc. was founded in 1924 and is headquartered in Tokyo, Japan.

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.