Financial Comparison: Bank of China (OTCMKTS:BACHY) versus Citizens (NASDAQ:CIZN)

Bank of China (OTCMKTS:BACHY) and Citizens (NASDAQ:CIZN) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, earnings, risk, dividends, profitability, institutional ownership and valuation.

Valuation & Earnings

This table compares Bank of China and Citizens”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	1.44	$33.81 billion	$2.61	7.26
Citizens	$40.95 million	1.25	$5.49 million	$1.68	5.35

Bank of China has higher revenue and earnings than Citizens. Citizens 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.

Risk & Volatility

Bank of China has a beta of 0.07, suggesting that its stock price is 93% less volatile than the S&P 500. Comparatively, Citizens has a beta of 0.09, suggesting that its stock price is 91% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Bank of China	20.44%	7.88%	0.68%
Citizens	7.00%	11.28%	0.37%

Analyst Ratings

This is a summary of recent ratings and target prices for Bank of China and Citizens, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bank of China	0	1	0	0	2.00
Citizens	0	1	4	0	2.80

Citizens has a consensus target price of $14.17, indicating a potential upside of 57.60%. Given Citizens’ stronger consensus rating and higher possible upside, analysts clearly believe Citizens is more favorable than Bank of China.

Dividends

Bank of China pays an annual dividend of $0.63 per share and has a dividend yield of 3.3%. Citizens pays an annual dividend of $0.08 per share and has a dividend yield of 0.9%. Bank of China pays out 24.1% of its earnings in the form of a dividend. Citizens pays out 4.8% 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. Citizens has increased its dividend for 1 consecutive years.

Insider & Institutional Ownership

9.7% of Citizens shares are held by institutional investors. 8.9% of Citizens shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Citizens beats Bank of China on 10 of the 17 factors compared between the two stocks.

About Bank of China

Bank of China Limited, together with its subsidiaries, provides various banking and financial services in Chinese Mainland, Hong Kong, Macao, Taiwan, and internationally. It operates through six segments: Corporate Banking, Personal Banking, Treasury Operations, Investment Banking, Insurance, and Other. The Corporate Banking segment provides current accounts, deposits, overdrafts, loans, payments and settlements, trade-related products, and other credit facilities, as well as foreign currency, derivative, and wealth management products for corporate customers, government authorities, and financial institutions. The Personal Banking segment offers savings deposits, personal loans, credit cards and debit cards, payments and settlements, wealth management, and funds and insurance agency services to retail customers. The Treasury Operations segment offers foreign exchange transactions, customer-based interest rate, and foreign exchange derivative transactions, as well as money market transactions, proprietary trading, and asset and liability management. The Investment Banking segment provides debt and equity underwriting and financial advisory, sale and trading of securities, stock brokerage, investment research, asset management services, and private equity investment services. The Insurance segment provides underwriting services for general and life insurance business, and insurance agency services. In addition, the company operates debt-to-equity swaps and other supporting, and aircraft and financial leasing business. The company was founded in 1912 and is headquartered in Beijing, China.

About Citizens

Citizens Holding Company operates as the bank holding company for The Citizens Bank of Philadelphia that provides various commercial and personal banking products and services. It offers demand deposits; and savings and time deposit accounts. The company also provides secured and unsecured loans; mortgage loans; single and multi-family housing, farm, residential and commercial construction, and commercial real estate loans; commercial, industrial, and agricultural production loans; and consumer loans, as well as issues letters of credit. In addition, it offers personal and corporate trust services; credit life and title insurance; and online and mobile banking services. The company was founded in 1908 and is headquartered in Philadelphia, Mississippi.