Head to Head Contrast: Commonwealth Bank of Australia (OTCMKTS:CBAUF) vs. ABN AMRO Bank (OTCMKTS:AAVMY)

Commonwealth Bank of Australia (OTCMKTS:CBAUF) and ABN AMRO Bank (OTCMKTS:AAVMY) are both financial services companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, dividends, institutional ownership, risk, valuation, earnings and analyst recommendations.

Insider & Institutional Ownership

13.6% of Commonwealth Bank of Australia shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Commonwealth Bank of Australia and ABN AMRO Bank”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Commonwealth Bank of Australia	N/A	N/A	N/A	$5.22	22.42
ABN AMRO Bank	N/A	N/A	N/A	$2.95	14.81

ABN AMRO Bank is trading at a lower price-to-earnings ratio than Commonwealth Bank of Australia, indicating that it is currently the more affordable of the two stocks.

Dividends

Commonwealth Bank of Australia pays an annual dividend of $3.83 per share and has a dividend yield of 3.3%. ABN AMRO Bank pays an annual dividend of $1.84 per share and has a dividend yield of 4.2%. Commonwealth Bank of Australia pays out 73.4% of its earnings in the form of a dividend. ABN AMRO Bank pays out 62.4% 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. ABN AMRO Bank is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Commonwealth Bank of Australia and ABN AMRO Bank, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Commonwealth Bank of Australia	0	0	0	0	0.00
ABN AMRO Bank	0	1	6	1	3.00

Profitability

This table compares Commonwealth Bank of Australia and ABN AMRO Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Commonwealth Bank of Australia	N/A	N/A	N/A
ABN AMRO Bank	N/A	N/A	N/A

Summary

ABN AMRO Bank beats Commonwealth Bank of Australia on 5 of the 8 factors compared between the two stocks.

About Commonwealth Bank of Australia

Commonwealth Bank of Australia provides financial services in Australia, New Zealand, and internationally. It operates through Retail Banking Services, Business Banking, Institutional Banking and Markets, and New Zealand segments. The company offers transaction, savings, and foreign currency accounts; term deposits; personal and business loans; overdrafts; equipment finance; credit cards; international payment and trade; and private banking services, as well as home and car loans. It also provides retail, premium, business, offshore, and institutional banking services; and funds management, superannuation, and share broking products and services, as well as car, health, life, income protection, and travel insurance. In addition, the company offers advisory services for high-net-worth individuals; equities trading and margin lending services; debt capital, transaction banking, working capital, and risk management services; and international and foreign exchange services. Commonwealth Bank of Australia was founded in 1911 and is based in Sydney, Australia.

About ABN AMRO Bank

ABN AMRO Bank N.V. provides various banking products and financial services to retail, private, and business clients in the Netherlands and internationally. It operates through three segments: Personal & Business Banking, Wealth Management, and Corporate Banking. The company provides savings and deposits products; investment and insurance products; and consumer, personal, car, and home improvement loan. It also issues, promotes, manages, and processes credit cards; trade finance, international payments, and treasury management; corporate finance and equity capital market; and revolving credit card facilities and pension schemes, as well as consumer credit and mortgages; and life and non-life insurance products. In addition, it offers asset-based solutions, including working capital solutions, equipment leases and loans, and vendor lease services; private banking and wealth-management-related services; and derivatives and equity clearing services. The company was incorporated in 2009 and is headquartered in Amsterdam, the Netherlands. ABN AMRO Bank N.V. operates as a subsidiary of Stichting Administratiekantoor Continuïteit Abn Amro Bank.