China Construction Bank (OTCMKTS:CICHY) versus China CITIC Bank (OTCMKTS:CHCJY) Financial Analysis

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

Analyst Ratings

This is a breakdown of current recommendations for China CITIC Bank and China Construction Bank, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
China CITIC Bank	0	0	0	0	0.00
China Construction Bank	0	1	0	0	2.00

Profitability

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

	Net Margins	Return on Equity	Return on Assets
China CITIC Bank	20.20%	8.48%	0.72%
China Construction Bank	25.63%	9.81%	0.78%

Dividends

China CITIC Bank pays an annual dividend of $0.81 per share and has a dividend yield of 4.2%. China Construction Bank pays an annual dividend of $0.80 per share and has a dividend yield of 4.0%. China CITIC Bank pays out 24.8% of its earnings in the form of a dividend. China Construction Bank pays out 22.2% 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.

Volatility and Risk

China CITIC Bank has a beta of 0.46, suggesting that its share price is 54% less volatile than the S&P 500. Comparatively, China Construction Bank has a beta of 0.13, suggesting that its share price is 87% less volatile than the S&P 500.

Valuation and Earnings

This table compares China CITIC Bank and China Construction Bank”s top-line revenue, earnings per share (EPS) 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	5.96
China Construction Bank	$188.88 billion	1.38	$46.68 billion	$3.60	5.53

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

Summary

China Construction Bank beats China CITIC Bank on 8 of the 11 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 China Construction Bank

China Construction Bank Corporation provides various banking and related financial services to individuals and corporate customers in the People's Republic of China and internationally. It operates through Corporate Finance Business, Personal Finance Business, Treasury and Asset Management Business, and Others segments. The company accepts various deposits, such as foreign currency, all in one accounts, RMB, corporate term and notification, and corporate demand deposits, as well corporate deposits by agreement. Its loan products include personal business, car, and housing loans; and SME, traditional credit, commercial draft, buyer credit, and RMB credit line loans. The company also offers credit cards; physical gold for personal investment and personal gold accounts; foreign exchange services; certificate treasury and savings bonds, securities deposit accounts, and securities services, as well as bank-securities transfer and book-entry treasury bond over the counter transaction services; and wealth management products. In addition, it provides collection, salaries payment, third-party collection and payment, insurance agency, and remittance services; international settlement and financing, and FI services; securities and fund settlement services; guarantee-based, consulting and advising, and factoring services; fund custody services; and e-banking services. Further, the company offers institutional services comprising services for government agencies, social security, banks cooperation, bank-securities cooperation, bank-insurance cooperation, and services for non-banking financial institutions. China Construction Bank Corporation was founded in 1954 and is headquartered in Beijing, the People's Republic of China.