China CITIC Bank (OTCMKTS:CHCJY – Get Free Report) and Fannie Mae (OTCMKTS:FNMA – Get Free Report) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, valuation, earnings, analyst recommendations, profitability, risk and dividends.
Profitability
This table compares China CITIC Bank and Fannie Mae’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| China CITIC Bank | 20.39% | 8.44% | 0.71% |
| Fannie Mae | 4.59% | -76.66% | 0.51% |
Insider & Institutional Ownership
0.0% of Fannie Mae shares are held by institutional investors. 1.0% of Fannie Mae shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| China CITIC Bank | 0 | 0 | 0 | 1 | 4.00 |
| Fannie Mae | 1 | 4 | 1 | 1 | 2.29 |
Fannie Mae has a consensus target price of $12.25, indicating a potential upside of 94.44%. Given Fannie Mae’s higher probable upside, analysts clearly believe Fannie Mae is more favorable than China CITIC Bank.
Risk and Volatility
China CITIC Bank has a beta of 0.31, suggesting that its stock price is 69% less volatile than the S&P 500. Comparatively, Fannie Mae has a beta of 1.66, suggesting that its stock price is 66% more volatile than the S&P 500.
Valuation and Earnings
This table compares China CITIC Bank and Fannie Mae”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 | $49.07 billion | 0.98 | $9.82 billion | $3.38 | 5.82 |
| Fannie Mae | $159.17 billion | 0.05 | $14.36 billion | $0.04 | 157.50 |
Fannie Mae has higher revenue and earnings than China CITIC Bank. China CITIC Bank is trading at a lower price-to-earnings ratio than Fannie Mae, indicating that it is currently the more affordable of the two stocks.
Summary
Fannie Mae beats China CITIC Bank on 8 of the 14 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 Fannie Mae
Federal National Mortgage Association provides financing solutions for mortgages in the United States. It operates through two segments, Single-Family and Multifamily. The Single-Family segment securitizes and purchases single-family fixed-rate or adjustable-rate, first-lien mortgage loans, or mortgage-related securities backed by these loans; and loans that are insured by Federal Housing Administration, loans guaranteed by the Department of Veterans Affairs and Rural Development Housing and Community Facilities Program of the U.S. Department of Agriculture, manufactured housing mortgage loans, and other mortgage-related securities. The Multifamily segment securitizes multifamily mortgage loans into Fannie Mae mortgage backed securities (MBS); purchases multifamily mortgage loans; and provides credit enhancement for bonds issued by state and local housing finance authorities to finance multifamily housing. This segment also issues structured MBS backed by Fannie Mae multifamily MBS; buys and sells multifamily agency mortgage-backed securities; and invests in low-income housing tax credit multifamily projects. Federal National Mortgage Association was founded in 1938 and is based in Washington, the District of Columbia.
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