Reviewing China Merchants Bank (OTCMKTS:CIHKY) & Carter Bankshares (NASDAQ:CARE)

China Merchants Bank (OTCMKTS:CIHKY) and Carter Bankshares (NASDAQ:CARE) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, dividends, valuation, analyst recommendations, institutional ownership, risk and profitability.

Dividends

China Merchants Bank pays an annual dividend of $1.18 per share and has a dividend yield of 3.4%. Carter Bankshares pays an annual dividend of $0.40 per share and has a dividend yield of 1.4%. China Merchants Bank pays out 27.8% of its earnings in the form of a dividend. Carter Bankshares pays out 6.8% 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.

Insider and Institutional Ownership

41.5% of Carter Bankshares shares are held by institutional investors. 2.4% of Carter Bankshares shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Earnings & Valuation

This table compares China Merchants Bank and Carter Bankshares”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
China Merchants Bank	$65.04 billion	2.69	$20.89 billion	$4.25	8.16
Carter Bankshares	$254.63 million	2.56	$31.00 million	$5.92	4.96

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

Analyst Recommendations

This is a breakdown of current recommendations for China Merchants Bank and Carter Bankshares, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
China Merchants Bank	0	1	0	0	2.00
Carter Bankshares	0	4	1	0	2.20

Carter Bankshares has a consensus price target of $30.75, suggesting a potential upside of 4.63%. Given Carter Bankshares’ stronger consensus rating and higher possible upside, analysts clearly believe Carter Bankshares is more favorable than China Merchants Bank.

Profitability

This table compares China Merchants Bank and Carter Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
China Merchants Bank	32.82%	12.45%	1.23%
Carter Bankshares	37.19%	7.55%	0.76%

Volatility & Risk

China Merchants Bank has a beta of 0.15, indicating that its share price is 85% less volatile than the S&P 500. Comparatively, Carter Bankshares has a beta of 0.6, indicating that its share price is 40% less volatile than the S&P 500.

Summary

Carter Bankshares beats China Merchants Bank on 9 of the 16 factors compared between the two stocks.

About China Merchants Bank

China Merchants Bank Co., Ltd., together with its subsidiaries, provides various banking products and services. It operates through Wholesale Finance Business, Retail Finance Business, and Other Business segments. The company offers current, demand, time, call, savings, notice, and renminbi accounts. Its loan products include personal commercial real estate, consumption, housing, and car loans; loans to finance for studying abroad; micro-business loans; mortgage loans for equipment; joint guarantee, special guarantee, and housing mortgage loan; bank acceptance, discount, liquid capital, and fixed asset loans; and loans for vessels. The company also offers credit cards; insurance products; open-ended funds; discount and guarantees for commercial bills, redemption of commercial bills, and guaranteed discount for commercial acceptance bills; and financial consultation, debt financing underwriting, merger and acquisition financing, and equity financing and enterprise listing services. In addition, it provides forfeiting and risk participation, escrow, cross-border RMB clearing, and interbank services; and risk and financial management, cross-border RMB and oversea financing, international factoring and settlement, and trade finance services. Further, the company offers financial leasing and guarantee, investment and wealth management, forex option and gold trading, forex express trading, international, offshore and private banking, custody, pension, and electronic banking services. The company also operates in Hong Kong, New York, London, Singapore, Luxembourg, Sydney, and Taipei. China Merchants Bank Co., Ltd. was founded in 1987 and is headquartered in Shenzhen, China.

About Carter Bankshares

Carter Bankshares, Inc. operates as the bank holding company for Carter Bank & Trust that provides various banking products and services in the United States. It accepts various deposit products, including checking, savings, retirement, and money market accounts, as well as certificates of deposits. The company also offers commercial loans comprising secured and unsecured loans; consumer loans, such as secured and unsecured loans for financing automobiles, home improvements, education, overdraft protection, and personal investments, as well as residential mortgages; real estate construction, acquisition, commercial, and industrial loans; home equity lines of credit; and credit cards, as well as originates and holds fixed and variable rate mortgage loans. In addition, it provides other banking services that include safe deposit boxes, direct deposit of payroll, and social security checks; online banking products, including online and mobile banking, online account opening, bill pay, e-statement, mobile deposit, digital wallet, and ATM services; title insurance and other financial institution-related products and services; and treasury and corporate cash management services. Carter Bankshares, Inc. was founded in 1974 and is headquartered in Martinsville, Virginia.