Seeking Alpha
Profile| Send Message|
( followers)  
Commerce Bancshares (NASDAQ:CBSH) provides consumer and commercial banking through 191 branch offices in the states of Missouri, Kansas, and central Illinois. The company also underwrites and sells insurance, engages in securities brokerage, manages proprietary mutual funds, and provides trust and estate planning services. CBSH has outperformed the S&P 500 significantly since 1985, yet with much less volatility; the shares have a beta of .60.

CBSH has raised the dividend every year since 1986. The current yield is 1.95% and the payout ratio is less than 30%. Commerce has also issued at least a 5% stock dividend every year since 1993.

CBSH shares made an all-time high of 52.86 last December, but since then they have been drifting sideways to lower as earnings, while good, have not met expectations. CBSH made a 52-week low last month at 47.88 and they have rallied a bit since then. The stock tends to set cyclical lows about three months apart. I am planning to buy some at the cycle low next January, or sooner if it makes fresh 52-week lows before then.

A 9 or 10% discount from the all-time high price may not seem like much of a bargain, but CBSH has a low beta, and this is a company which has amply rewarded patient, long-term investors. They have weathered many an economic downturn with hardly a scratch.

.........

Fulton Financial Corp. (NASDAQ:FULT) offers consumer and commercial banking services through 254 branch offices in Pennsylvania, Maryland, New Jersey, Delaware, and Virginia. The company also engages in insurance sales, investment management, trust, brokerage, and investment advisory services. Fulton has a market capitalization of 2.8B. This company has a good growth record approximately equal to the S&P 500, but with less volatiliy; the beta of the shares is only .72.

FULT offers a generous dividend yield of 3.7%, although the current payout ratio is a bit high at 54%. The company’s website shows that the cash dividend has been increased every year for the last 20 years; in addition, the company has distributed an annual stock dividend every year since 1990, ranging from 5% stock dividends to 5-for-4 splits. Thus, FULT has been an excellent vehicle for long-term investors.

On a short-term basis, the weekly chart shows fairly well-defined cycles that have been recurring for more than two years - the peaks have been six to seven months apart, and so have the valleys. FULT peaked in July and is declining. The next cycle low would be expected any time between now and December, and I think that will be a great time to get on board. Fulton Financial looks like a nice component of a geographically diversified portfolio of mid-cap bank stocks.

Source: Two Midcap Bank Stocks Worth a Look