Comparing Timberland Bancorp (NASDAQ:TSBK) & Bank of China (OTCMKTS:BACHY)

Timberland Bancorp (NASDAQ:TSBK) and Bank of China (OTCMKTS:BACHY) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, dividends, profitability and risk.

Dividends

Timberland Bancorp pays an annual dividend of $1.20 per share and has a dividend yield of 2.6%. Bank of China pays an annual dividend of $0.63 per share and has a dividend yield of 3.3%. Timberland Bancorp pays out 30.1% of its earnings in the form of a dividend. Bank of China pays out 24.1% 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. Timberland Bancorp has raised its dividend for 13 consecutive years. Bank of China is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Timberland Bancorp and Bank of China’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Timberland Bancorp	26.46%	11.72%	1.55%
Bank of China	20.44%	7.88%	0.68%

Earnings & Valuation

This table compares Timberland Bancorp and Bank of China”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Timberland Bancorp	$114.63 million	3.09	$29.16 million	$3.99	11.41
Bank of China	$169.73 billion	1.45	$33.81 billion	$2.61	7.32

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

Volatility & Risk

Timberland Bancorp has a beta of 0.31, suggesting that its stock price is 69% less volatile than the S&P 500. Comparatively, Bank of China has a beta of 0.08, suggesting that its stock price is 92% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Timberland Bancorp and Bank of China, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Timberland Bancorp	0	0	0	1	4.00
Bank of China	0	1	0	0	2.00

Institutional & Insider Ownership

65.5% of Timberland Bancorp shares are owned by institutional investors. 3.6% of Timberland Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Timberland Bancorp beats Bank of China on 12 of the 16 factors compared between the two stocks.

About Timberland Bancorp

Timberland Bancorp, Inc. operates as the bank holding company for Timberland Bank that provides various community banking services in Washington. It offers various deposit products, including money market deposit, checking, and regular savings accounts, as well as certificates of deposit. The company also provides one-to four-family residential, multi-family, and commercial real estate loans; and construction lending products, such as custom and owner/builder, speculative one- to four-family, commercial, multi-family, land development, and land development. In addition, it offers consumer loans comprising home equity lines of credit and second mortgage loans, automobile loans, boat loans, motorcycle loans, recreational vehicle loans, savings account loans, and unsecured loans; and commercial business loans. Timberland Bancorp, Inc. was founded in 1915 and is headquartered in Hoquiam, Washington.

About Bank of China

Bank of China Limited, together with its subsidiaries, provides various banking and financial services in Chinese Mainland, Hong Kong, Macao, Taiwan, and internationally. It operates through six segments: Corporate Banking, Personal Banking, Treasury Operations, Investment Banking, Insurance, and Other. The Corporate Banking segment provides current accounts, deposits, overdrafts, loans, payments and settlements, trade-related products, and other credit facilities, as well as foreign currency, derivative, and wealth management products for corporate customers, government authorities, and financial institutions. The Personal Banking segment offers savings deposits, personal loans, credit cards and debit cards, payments and settlements, wealth management, and funds and insurance agency services to retail customers. The Treasury Operations segment offers foreign exchange transactions, customer-based interest rate, and foreign exchange derivative transactions, as well as money market transactions, proprietary trading, and asset and liability management. The Investment Banking segment provides debt and equity underwriting and financial advisory, sale and trading of securities, stock brokerage, investment research, asset management services, and private equity investment services. The Insurance segment provides underwriting services for general and life insurance business, and insurance agency services. In addition, the company operates debt-to-equity swaps and other supporting, and aircraft and financial leasing business. The company was founded in 1912 and is headquartered in Beijing, China.