Critical Survey: Erste Group Bank (OTCMKTS:EBKDY) versus China CITIC Bank (OTCMKTS:CHCJY)

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

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Erste Group Bank and China CITIC Bank, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Erste Group Bank	0	3	3	1	2.71
China CITIC Bank	0	1	0	0	2.00

Risk & Volatility

Erste Group Bank has a beta of 0.85, suggesting that its stock price is 15% less volatile than the S&P 500. Comparatively, China CITIC Bank has a beta of 0.28, suggesting that its stock price is 72% less volatile than the S&P 500.

Insider and Institutional Ownership

0.4% of Erste Group Bank shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Erste Group Bank and China CITIC Bank”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Erste Group Bank	$23.77 billion	1.91	$3.97 billion	$4.98	11.73
China CITIC Bank	$49.07 billion	0.97	$9.82 billion	$3.38	5.77

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Erste Group Bank	19.27%	10.96%	1.01%
China CITIC Bank	20.39%	8.44%	0.71%

Dividends

Erste Group Bank pays an annual dividend of $0.27 per share and has a dividend yield of 0.5%. China CITIC Bank pays an annual dividend of $0.87 per share and has a dividend yield of 4.5%. Erste Group Bank pays out 5.4% of its earnings in the form of a dividend. China CITIC Bank pays out 25.7% 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.

Summary

Erste Group Bank beats China CITIC Bank on 11 of the 15 factors compared between the two stocks.

About Erste Group Bank

Erste Group Bank AG provides a range of banking and other financial services to retail, corporate, and public sector customers. The company operates through Retail, Corporates, Group Markets, Asset/Liability Management & Local Corporate Center, Savings Banks, and Group Corporate Center segments. It provides mortgage and consumer loans, investment products, current accounts, savings products, and credit cards, as well as cross selling products, such as leasing, insurance, and building society products. The company also offers factoring and accounts receivable purchasing; investment, acquisition and leveraged, project, and commercial real estate finance; interest rate and currency hedging, letters of credit, documentary collections, and guarantees; account management, payments, digital-banking, cash logistics, and payment factory and cash pooling services; documentary collection, equity interests and investments, revolving export credits lines, letters of credit, customer financing, and export guarantee; and loan syndication, and debt and equity capital market services. In addition, it provides cash management, trade finance, customer referral, markets execution, debt capital markets, and custody and brokerage services. Further, the company offers corporate finance; portfolio management; trading and market; trade execution, market making, and short-term liquidity management; and asset/liability management services, as well as working capital and bridge loans. It operates in Austria, the Czech Republic, Slovakia, Romania, Hungary, Serbia, Croatia, and internationally. The company was founded in 1819 and is headquartered in Vienna, Austria.

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.