This is a step-by-step stock review to answer the question, is Comerica (CMA) stock a good buy?
This article will teach you how to use the 4Ms of investing. This will be a detailed walkthrough to show you how the 4Ms work and why they are important. If you are interested, you can log into Tykr to use the 4M Confidence Booster (Powered by OpenAI) which will allow you to complete a 4M Analysis in less than 60 seconds.
What are the 4Ms?
- MOS (Margin of Safety) – The MOS is the math part of investing which includes the Summary, Score, and MOS (Margin of Safety).
- Meaning – The meaning is the business model and how scalable the revenue streams are.
- Moat – The moat is how the business compares to other companies in the same Sector and Industry.
- Management – The management is the track record of the CEO.
What 4M score are we going for?
- 80-100 = High confidence – Yay! You should have high confidence buying this stock. It passes all 4M!
- 60-79 = Moderate confidence – Alert! There may be better stocks in the market. Only buy this stock if you truly believe the company will improve!
- 0-59 = Low confidence – Warning! There are better stocks in the market. Due to the low score, you should consider looking at other stocks.
Table of Contents
The following links will direct you to key topics to help answer the question, is Comerica (CMA) stock a good buy?
1. Comerica Company History
When investing in stocks, it’s important to know the company’s history. This helps us understand the various revenue streams, if they acquired other companies, how they grew through difficult times, and how they separated themselves from the competition.
- Founding: Comerica was founded in 1849 as the Detroit Savings Fund Institute in Detroit, Michigan.
- Name Changes: Renamed as The Detroit Bank in 1871 and later The Detroit Bank & Trust Company in 1956. Became Comerica Incorporated in 1982 to reflect its diversified operations.
- Expansion: Expanded beyond Michigan with significant growth in Texas, California, and Florida through acquisitions and opening new branches.
- Acquisitions: Acquired several banks and financial institutions, including Grand Bancshares in 1988, Plaza Commerce Bancorp in 1996, and Imperial Bank in 2001.
- Services: Offers a comprehensive range of financial services, including commercial banking, retail banking, wealth management, and investment services.
- Headquarters Relocation: Moved its corporate headquarters from Detroit to Dallas, Texas, in 2007 to better align with its growing presence in the Sun Belt region.
- Public Listing: Trades on the New York Stock Exchange under the ticker symbol “CMA.”
- Community Involvement: Actively involved in community development and philanthropic efforts, supporting various local and national causes.
- Innovation and Technology: Invests in technology and digital banking solutions to enhance customer experience and streamline operations.
- Financial Strength: Known for its strong balance sheet, conservative lending practices, and focus on relationship banking.
- Leadership and Governance: Maintains a reputation for strong leadership and corporate governance, ensuring stability and trust among its stakeholders.
Comerica’s history is marked by strategic growth, a commitment to customer service, and a strong presence in key U.S. markets, making it a respected name in the banking industry.
2. MOS (Margin Of Safety)
When investing in a company, the first step is to look at the financials. Fortunately, Tykr does this for us automatically. The higher the score, the stronger the financials and the safer the investment. The higher the MOS, the higher the potential returns you can make.
- Summary: Watch
- Score: 61
- MOS: 1%
To see the most up-to-date Summary, Score, and MOS, please log into Tykr.
3. Meaning
When investing in a company, it’s important to know how a company makes money. A mature business model has multiple streams of revenue which allow the company to weather downturns in the economy.
Here is how Comerica makes money:
- Interest Income: Generates revenue from the interest earned on loans and other financial products provided to customers.
- Fees and Charges: Earns from various fees, including account maintenance fees, overdraft fees, and transaction fees for banking services.
- Loan Origination Fees: Makes money from fees associated with processing and underwriting loans for individuals and businesses.
- Investment Services: Profits from providing wealth management and investment advisory services to clients.
- Commercial Banking: Generates income from services provided to businesses, such as cash management and merchant services.
- Mortgage Services: Earns from originating and servicing mortgage loans, including fees and interest payments.
- Deposit Services: Profits from deposit account services, including savings and checking accounts, and the associated interest margins.
- Treasury Management: Makes money from offering treasury management solutions to businesses, helping them manage cash flow and payments.
Here are a few of the other companies that Comerica has acquired over the years. This is important because a company will use a “Buy before build” philosophy to go to market faster and add additional streams of revenue. A company with more revenue streams has a more stable business model. Keep in mind, that most companies don’t build new software because it takes too long to go to market and generate revenue.
- Michigan Commerce Bank
- Grand Bancshares
- Plaza Commerce Bancorp
- Imperial Bank
- Dallas-based Comerica Bank branches
4. Moat
When investing in a company, it’s important to understand how a company ranks against other companies in the same sector and industry. Based on the Score, here is how Comerica stacks up against other companies.
- Banco BBVA Argentina S.A. (BBAR) – 100
- Banco Macro S.A. (BMA) – 89
- OFG Bancorp. (OFG) – 89
- Customers Bancorp, Inc. (CUBI) – 89
- ICICI Bank Limited. (IBN) – 83
- Comerica Incorporated. (CMA) – 61
To see the most up-to-date Summary, Score, and MOS and each stock, please log into Tykr.
5. Management
When investing in a company, it’s important to understand who the CEO is, what they have accomplished in the past, and how they have helped this company grow. Good leaders typically have stronger cultures, less turnover, and better returns in the stock market.
Curtis C. (Curtis C. Farmer) has made significant contributions to Comerica. Here are some of his key accomplishments:
- Strategic Leadership: Became CEO in 2020, leading Comerica through a challenging economic environment with strategic vision and stability.
- Digital Transformation: Accelerated Comerica’s digital banking initiatives, enhancing online and mobile banking services to improve customer experience and operational efficiency.
- Operational Efficiency: Focused on streamlining operations and cost management, implementing measures to improve profitability and reduce expenses.
- Revenue Growth: Drove efforts to grow revenue through targeted business strategies and expanded services in key markets.
- Risk Management: Strengthened risk management practices and financial controls to navigate economic uncertainties and regulatory changes.
- Community Engagement: Promoted community involvement and corporate social responsibility, reinforcing Comerica’s commitment to local and national causes.
- Diverse Leadership: Advanced diversity and inclusion initiatives within the company, fostering a more inclusive and representative
- workplace.
6. 4M Score
All of our homework on this company leads up to the 4M Score. A lot of investors only look at the numbers. Yes, it’s important to look at the first M (MOS) which is the math part of investing but it’s also important to look past the numbers and also look at the Meaning, Moat, and Management. If all 4Ms pass, we should have high confidence in buying this stock.
What 4M score are we going for?
- 80-100 = High confidence – Yay! You should have high confidence buying this stock. It passes all 4M!
- 60-79 = Moderate confidence – Alert! There may be better stocks in the market. Only buy this stock if you truly believe the company will improve!
- 0-59 = Low confidence – Warning! There are better stocks in the market. Due to the low score, you should consider looking at other stocks.
👉 The 4M Score of Comerica (CMA) is 53/100.
To see the most up-to-date 4M Score, please log into Tykr.
7. Is Comerica (CMA) stock a good buy?
Some of the top questions investors can have is Comerica (CMA) stock a good buy or should I buy Comerica (CMA) stock?
Comerica is a strong investment due to its consistent revenue growth and diversified banking services. Under Curtis C. Farmer’s leadership, the company has enhanced its digital banking capabilities and improved customer experience. Comerica’s focus on relationship banking, commercial lending, and wealth management has driven profitability. The bank’s expansion into key markets like Texas, California, and Michigan diversifies its revenue streams. Strong capital position and prudent risk management provide a stable foundation for future growth.
However, investors should be aware of the competitive banking landscape, economic fluctuations, and regulatory changes that may impact performance. Despite these challenges, Comerica’s strategic focus on growth, efficiency, and strong financial performance make it an attractive investment for those interested in the banking sector.
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To truly know if Comerica is a good stock to buy or sell, we recommend you log into Tykr. Within seconds you can see the Summary, Score, MOS, and 4M Score.
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