Reviewing China CITIC Bank (OTCMKTS:CHCJY) & Bank of China (OTCMKTS:BACHY)

Bank of China (OTCMKTS:BACHY) and China CITIC Bank (OTCMKTS:CHCJY) are both large-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, dividends, valuation, earnings and profitability.

Earnings & Valuation

This table compares Bank of China and China CITIC Bank”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bank of China	$169.73 billion	1.52	$33.81 billion	$2.68	7.47
China CITIC Bank	$49.07 billion	1.05	$9.82 billion	$3.45	6.13

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

Dividends

Bank of China pays an annual dividend of $0.63 per share and has a dividend yield of 3.1%. China CITIC Bank pays an annual dividend of $0.95 per share and has a dividend yield of 4.5%. Bank of China pays out 23.5% of its earnings in the form of a dividend. China CITIC Bank pays out 27.5% 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.

Analyst Ratings

This is a summary of current ratings and price targets for Bank of China and China CITIC Bank, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bank of China	0	1	0	0	2.00
China CITIC Bank	0	1	0	0	2.00

Volatility & Risk

Bank of China has a beta of 0.08, meaning that its share price is 92% less volatile than the S&P 500. Comparatively, China CITIC Bank has a beta of 0.35, meaning that its share price is 65% less volatile than the S&P 500.

Profitability

This table compares Bank of China and China CITIC Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bank of China	20.76%	7.88%	0.68%
China CITIC Bank	20.81%	8.35%	0.71%

Summary

China CITIC Bank beats Bank of China on 6 of the 11 factors compared between the two stocks.

About Bank of China

Bank of China Limited is a state-owned commercial bank founded in 1912. It is one of China’s major banking groups and provides financial services to individuals, businesses, and institutions. Its services include deposits, loans, payments, wealth management, trade finance, foreign-exchange services, and other corporate and financial-market offerings. The bank serves customers in mainland China and internationally through its branches and subsidiaries.

About China CITIC Bank

China CITIC Bank Corporation is a commercial bank headquartered in Beijing, China, and a subsidiary of state-owned CITIC Group. Established in 1987 as CITIC Industrial Bank, it adopted its current name in 2005. The bank serves individual and business customers through services that include deposits, loans, payments and settlement, credit cards, wealth management, and corporate finance. It also provides financial-market and investment-banking services. China CITIC Bank operates a nationwide network in mainland China and supports customers’ cross-border banking and trade-finance needs through its international business operations.