Reviewing China Merchants Bank (OTCMKTS:CIHKY) and Intesa Sanpaolo (OTCMKTS:ISNPY)

Intesa Sanpaolo (OTCMKTS:ISNPY) and China Merchants Bank (OTCMKTS:CIHKY) are both large-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, earnings, analyst recommendations, institutional ownership, profitability, valuation and dividends.

Risk & Volatility

Intesa Sanpaolo has a beta of 0.79, suggesting that its share price is 21% less volatile than the S&P 500. Comparatively, China Merchants Bank has a beta of 0.2, suggesting that its share price is 80% less volatile than the S&P 500.

Dividends

Intesa Sanpaolo pays an annual dividend of $1.91 per share and has a dividend yield of 4.1%. China Merchants Bank pays an annual dividend of $1.18 per share and has a dividend yield of 3.5%. Intesa Sanpaolo pays out 51.3% of its earnings in the form of a dividend. China Merchants Bank pays out 29.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Valuation & Earnings

This table compares Intesa Sanpaolo and China Merchants Bank”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Intesa Sanpaolo	$43.96 billion	3.16	$10.54 billion	$3.72	12.66
China Merchants Bank	$65.04 billion	2.64	$20.89 billion	$4.03	8.45

China Merchants Bank has higher revenue and earnings than Intesa Sanpaolo. China Merchants Bank is trading at a lower price-to-earnings ratio than Intesa Sanpaolo, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Intesa Sanpaolo and China Merchants Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Intesa Sanpaolo	25.19%	14.10%	1.02%
China Merchants Bank	32.69%	12.45%	1.23%

Insider & Institutional Ownership

1.2% of Intesa Sanpaolo shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and target prices for Intesa Sanpaolo and China Merchants Bank, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Intesa Sanpaolo	0	3	4	1	2.75
China Merchants Bank	0	1	0	0	2.00

Summary

Intesa Sanpaolo beats China Merchants Bank on 9 of the 15 factors compared between the two stocks.

About Intesa Sanpaolo

Intesa Sanpaolo S.p.A. provides various financial products and services primarily in Italy. It operates through six segments: Banca dei Territori, IMI Corporate & Investment Banking, International Subsidiary Banks, Asset Management, Private Banking, and Insurance. The company offers lending and deposit products; private and commercial banking, corporate and transaction banking, structured finance, investment banking, public finance, and capital markets; industrial credit, leasing, and factoring; asset management; life and non-life insurance and pension products; asset and wealth management; private investments; and bancassurance products. The company serves individuals, small and medium-sized businesses, non-profit customers, corporates and financial institutions, public administration, private clients and high net worth individuals, institutional clientele, and other customers. Intesa Sanpaolo S.p.A. was founded in 1998 and is headquartered in Turin, Italy.

About China Merchants Bank

China Merchants Bank Co., Ltd., together with its subsidiaries, provides various banking products and services. It operates through Wholesale Finance Business, Retail Finance Business, and Other Business segments. The company offers current, demand, time, call, savings, notice, and renminbi accounts. Its loan products include personal commercial real estate, consumption, housing, and car loans; loans to finance for studying abroad; micro-business loans; mortgage loans for equipment; joint guarantee, special guarantee, and housing mortgage loan; bank acceptance, discount, liquid capital, and fixed asset loans; and loans for vessels. The company also offers credit cards; insurance products; open-ended funds; discount and guarantees for commercial bills, redemption of commercial bills, and guaranteed discount for commercial acceptance bills; and financial consultation, debt financing underwriting, merger and acquisition financing, and equity financing and enterprise listing services. In addition, it provides forfeiting and risk participation, escrow, cross-border RMB clearing, and interbank services; and risk and financial management, cross-border RMB and oversea financing, international factoring and settlement, and trade finance services. Further, the company offers financial leasing and guarantee, investment and wealth management, forex option and gold trading, forex express trading, international, offshore and private banking, custody, pension, and electronic banking services. The company also operates in Hong Kong, New York, London, Singapore, Luxembourg, Sydney, and Taipei. China Merchants Bank Co., Ltd. was founded in 1987 and is headquartered in Shenzhen, China.