When “stuff” starts to go fan-ward in the bank sector, Commerce Bancshares (CBSH)
often shines. Conservatively run, Commerce can often get left behind
when things are going great, but investors often prize its more reliable
earnings performance and credit quality. And even though Commerce isn’t
really thought of as a grower, high single-digit trailing tangible book
value and core earnings growth, as well as double-digit EPS growth,
isn’t exactly bad.
Valuation is still a sticking
point for me. Commerce has outperformed its peers over the past six and
twelve months, but it’s tough to connect the dots on the valuation
today. I like management’s efforts to expand its commercial banking
footprint and withstand increasing competition in its core market, but
it looks like there’s already a meaningful quality premium built into
the share price.
Commerce Bancshares Well-Rewarded For Its Quality And Stability
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