Here's Why Commerce Bancshares (CBSH) Stock is a Must Buy Now

Core Viewpoint - Commerce Bancshares, Inc. (CBSH) is positioned for growth due to decent loan demand, high interest rates, and a balance sheet repositioning strategy, supported by solid liquidity and non-interest income growth [1] Financial Performance - The Zacks Consensus Estimate for CBSH's earnings has increased slightly for 2024 and 2025 to $3.94 and $3.89, respectively [1] - Year-to-date, CBSH shares have increased by 16.2%, outperforming the industry growth of 9.2% [2] - Earnings growth for CBSH has been 8.9% over the past three to five years, driven by organic growth strategies and strong risk management [4] - Projections indicate earnings growth of 4.8%, 1%, and 6% for 2024, 2025, and 2026, respectively [4] Revenue and Growth - CBSH's total revenues have experienced a compound annual growth rate (CAGR) of 3.5% from 2018 to 2023, continuing into the first half of 2024 [5] - Revenue growth is supported by increased loan demand and fee income, although rising funding costs may have some impact [5] - Estimates for total revenue growth are 3.6%, 1.4%, and 1.9% for 2024, 2025, and 2026, respectively [6] Balance Sheet Strength - As of June 30, 2024, CBSH had total cash and cash equivalents of $2.5 billion and total debt of $580.4 million [7] - The company holds investment grade ratings of A- with a stable outlook from Standard & Poor's, indicating a solid liquidity position [7] Capital Distribution - CBSH has a strong history of capital distributions, including a 5% stock dividend paid consistently over the past 25 years [8] - The company has been paying quarterly cash dividends and has a share repurchase plan, with approximately 4.3 million shares remaining available under authorization as of June 30, 2024 [8] - The efficient capital distributions are expected to enhance shareholder value due to the company's earnings strength and liquidity position [9] Return on Equity - CBSH's trailing 12-month Return on Equity (ROE) stands at 16.5%, significantly higher than the industry average of 10.9%, reflecting effective utilization of shareholders' funds [9]