Head-To-Head Comparison: Agri Bank China (OTCMKTS:ACGBY) versus HSBC (NYSE:HSBC)

Agri Bank China (OTCMKTS:ACGBY) and HSBC (NYSE:HSBC) are both large-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, institutional ownership, valuation, dividends and profitability.

Analyst Ratings

This is a summary of current ratings for Agri Bank China and HSBC, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Agri Bank China	0	1	0	1	3.00
HSBC	0	8	4	0	2.33

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Agri Bank China	21.45%	9.35%	0.61%
HSBC	16.06%	13.35%	0.82%

Dividends

Agri Bank China pays an annual dividend of $0.72 per share and has a dividend yield of 3.8%. HSBC pays an annual dividend of $1.98 per share and has a dividend yield of 1.9%. Agri Bank China pays out 25.9% of its earnings in the form of a dividend. HSBC pays out 32.5% 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. Agri Bank China is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility and Risk

Agri Bank China has a beta of 0.11, meaning that its share price is 89% less volatile than the S&P 500. Comparatively, HSBC has a beta of 0.57, meaning that its share price is 43% less volatile than the S&P 500.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Agri Bank China	$188.76 billion	1.39	$40.48 billion	$2.78	6.74
HSBC	$131.35 billion	2.71	$22.29 billion	$6.10	16.98

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

Institutional and Insider Ownership

1.5% of HSBC shares are held by institutional investors. 0.0% of HSBC shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

HSBC beats Agri Bank China on 9 of the 16 factors compared between the two stocks.

About Agri Bank China

Agricultural Bank of China Limited, together with its subsidiaries, provides banking products and services. The company operates through Corporate Banking, Personal Banking, and Treasury Operations segments. It offers demand, personal call, foreign currency call, time or demand optional, foreign exchange call, foreign exchange time, savings, agreed term, and negotiated deposit accounts, as well as certificates of deposit; and loans, including housing, consumer, business, fixed asset, working capital, real estate, and entrusted syndicated loans, as well as trade finances, guarantees and commitments, and loans with custody of export rebates accounts. The company provides credit card, debit card, payment and settlement, private banking, cash management, investment banking, custody, financial market, and financial institution services, as well as trading and wealth management services; and personal fund collection and automatic transfer services. In addition, it offers agro-related personal and corporate banking products and services; telephone, mobile, self-service, television, and SMS banking services; financial leasing services; fund management services; asset custodian services; and insurance and reinsurance related products and services. The company operates domestic branches, including specialized institutions, training institutes, tier-1 branches, tier-2 branches, tier-1 sub-branches, foundation-level branch outlets and other establishments; overseas branches in Hong Kong, Singapore, Seoul, New York, Dubai International Financial Centre, Tokyo, Frankfurt, Sydney, Luxemburg, Dubai, London, Macao, and Hanoi; and overseas representative offices in Vancouver, Taipei, Sao Paulo, and Dushanbe. The company was founded in 1951 and is based in Beijing, the People's Republic of China.

About HSBC

HSBC Holdings plc provides banking and financial services worldwide. The company operates through Wealth and Personal Banking, Commercial Banking, and Global Banking and Markets segments. The Wealth and Personal Banking segment offers retail banking and wealth products, including current and savings accounts, mortgages and personal loans, credit and debit cards, and local and international payment services; and wealth management services comprising insurance and investment products, global asset management services, investment management, and private wealth solutions. This segment serves personal banking and high net worth individuals. The Commercial Banking segment provides credit and lending, treasury management, payment, cash management, commercial insurance, and investment services; commercial cards; international trade and receivables finance services; foreign exchange products; capital raising services on debt and equity markets; and advisory services. It serves small and medium sized enterprises, mid-market enterprises, and corporates. The Global Banking and Markets segment offers financing, advisory, and transaction services; and credit, rates, foreign exchange, equities, money markets, and securities services; and engages in principal investment activities. It serves government, corporate and institutional clients, and private investors. HSBC Holdings plc was founded in 1865 and is headquartered in London, the United Kingdom.