Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche

Finance

Is Comercia (CMA) making money?

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The high price of major stocks has many investors looking at more obscure equities, such as regional banks. For example, Comercia Incorporated (NYSE: CMA) share price rose from $45.34 on 26 October 2020 to $85.72 on 28 October 2021.

Comercia (CMA) operates banks in Michigan, California, Arizona, Florida, Ontario, Texas, and Mexico. Comercia also operates an insurance company. Comercia offers some online banking services, wealth management, brokerage services, investment services, and health insurance, including Medicare plans online.

Many investors view regional banks such as Comercia, as alternatives to unpopular monster banks, including Wells Fargo (WFC) and investment banks such as Goldman Sachs (NYSE: GS). Hence, we need to ask if Comerica makes money?

Does Comercia make money?

Comercia (CMA) makes some money. It reported quarterly revenues of $755 million, a quarterly gross profit of $755 million and a quarterly operating income of $332 million on 30 September 2021.

Comercia is experiencing some growth. Stockrow estimates the revenues grew by 6.04% in the quarter ending on 30 September 2021. However, Comercia experienced six straight quarters of revenue shrinkage during the pandemic.

For example, the revenues fell by 23.37% in the quarter ending on 30 September 2020 and 10.76% in the quarter ending on 31 March 2020. In contrast, the quarterly revenues shrank by -2.27% in the quarter ending on 30 June 2021.

Comercia’s quarterly revenues grew from $712 million on 30 September 2020 to $755 million on 30 September 2021. In contrast, the quarterly gross profit grew from $710 million on 30 September 2020 to $755 million on 30 September 2021.

How Much Cash Does Comercia Generate?

No Comercia (NYSE: CMA) cash flows for 30 September 2021 are available. However, Comercia reported a negative quarterly operating cash flow of -$156 million and a quarterly ending cash flow of $1.63 billion on 30 June 2021.

Comercia can generate enormous amounts of cash. It reported quarterly ending cash flows of $14.871 billion on 30 June 2021 and $4.626 billion on 31 December 2020. Comercia can also generate enormous of cash from financing. It reported quarterly financing cash flows of $1.105 billion on 30 September 2021, $4.39 billion on 31 December 2020, and $8.221 billion on 30 June 2020.

Moreover, Comercia reported $23.776 billion in cash and short-term investments on 30 September 2021. The cash and short-term investments grew from $11.301 billion on 30 September 2020.

Hence, Comercia passes one value investors’ test for finance companies. It generates enormous amounts of cash.

What Value Does Comercia Have?

Impressively, Comercia Incorporated (CMA) survived the pandemic with more cash and less debt. The total debt fell from $10.372 billion on 31 March 2020 to $2.827 billion on 30 September 2021.

Comercia also gained value during the pandemic. The Total Assets grew from $76.337 billion on 31 March 2020 to $94.529 billion on 30 September 2021. Hence, Comercia is growing and gaining value.

Therefore, I think Mr. Market fairly priced Comercia at $85.72 on 28 October 2021. Additionally, I consider Comercia a value investment because of the low share price and the growing cash.

Comercia is a terrific dividend stock. Comercia has scheduled four 68¢ quarterly dividends in 2022. Overall, Dividend.com estimates Comercia shares offered a $2.72 forward dividend and a 3.17% forward dividend yield on 28 October 2021.

I consider Comercia an excellent cheap value investment. If you are seeking an obscure stock with growing share value, terrific dividends, and cash, Comercia Incorporated (NYSE: CMA) is worth a look.