Reviewing China CITIC Bank (OTCMKTS:CHCJY) & NatWest Group (NYSE:NWG)

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

Analyst Recommendations

This is a breakdown of current ratings and target prices for China CITIC Bank and NatWest Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
China CITIC Bank	0	0	0	0	0.00
NatWest Group	2	1	2	0	2.00

Earnings and Valuation

This table compares China CITIC Bank and NatWest Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
China CITIC Bank	$47.42 billion	N/A	$9.54 billion	$3.27	5.22
NatWest Group	$36.57 billion	1.60	$6.14 billion	$1.55	9.38

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
China CITIC Bank	19.59%	8.44%	0.72%
NatWest Group	16.84%	11.99%	0.68%

Risk and Volatility

China CITIC Bank has a beta of 0.38, indicating that its share price is 62% less volatile than the S&P 500. Comparatively, NatWest Group has a beta of 1.05, indicating that its share price is 5% more volatile than the S&P 500.

Insider and Institutional Ownership

1.3% of NatWest Group shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

China CITIC Bank pays an annual dividend of $0.73 per share and has a dividend yield of 4.3%. NatWest Group pays an annual dividend of $0.50 per share and has a dividend yield of 3.4%. China CITIC Bank pays out 22.3% of its earnings in the form of a dividend. NatWest Group pays out 32.3% 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. China CITIC Bank is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

China CITIC Bank beats NatWest Group on 7 of the 13 factors compared between the two stocks.

About China CITIC Bank

China CITIC Bank Corporation Limited provides various banking products and services in the People's Republic of China and internationally. The company operates in segments, such as Corporate Banking, Retail Banking, and Financial Market business. It accepts deposits; offers corporate and personal loans; and provides securities agency, remittance and settlement, and guarantee services, as well as investment banking and international services. The company also engages in the capital markets operations and inter-bank operations, including inter-bank money market transactions, repurchase transactions, investments, and trading in debt instruments; and derivatives and forex trading. In addition, it offers asset management, finance leasing, wealth management, ageing finance, private banking, credit card, payroll, and other non-banking financial services. The company serves corporations, government agencies, and non-financial institutions; and individual customers and micro and small enterprises. The company operates tier-one branches, tier-two branches, and sub-branches; self-service banks; and self-service terminals, as well as smart teller machines. The company was founded in 1987 and is headquartered in Beijing, the People's Republic of China. China CITIC Bank Corporation Limited operates as a subsidiary of CITIC Financial Holdings Co., Ltd.

About NatWest Group

NatWest Group plc, together with its subsidiaries, provides banking and financial products and services to personal, commercial, corporate, and institutional customers in the United Kingdom and internationally. It operates through Retail Banking, Private Banking, and Commercial & Institutional segments. The Retail Banking segment offers a range of banking products and related financial services, such as current accounts, mortgages, personal unsecured lending, and personal deposits, as well as mobile and online banking services. The Private Banking segment provides private banking and wealth management products for high-net-worth individuals and their business interests. The Commercial & Institutional segment offers banking and financial solutions to large corporate organisations, multi-nationals, and financial institutions. The company was formerly known as The Royal Bank of Scotland Group plc and changed its name to NatWest Group plc in July 2020. NatWest Group plc was founded in 1727 and is headquartered in Edinburgh, the United Kingdom.