Critical Comparison: Lloyds Banking Group (NYSE:LYG) versus Agri Bank China (OTCMKTS:ACGBY)

Agri Bank China (OTCMKTS:ACGBY) and Lloyds Banking Group (NYSE:LYG) are both large-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their risk, analyst recommendations, dividends, valuation, profitability, earnings and institutional ownership.

Insider & Institutional Ownership

2.2% of Lloyds Banking Group shares are owned by institutional investors. 0.0% of Lloyds Banking Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Agri Bank China and Lloyds Banking Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Agri Bank China	21.14%	9.25%	0.63%
Lloyds Banking Group	18.04%	8.38%	0.42%

Risk & Volatility

Agri Bank China has a beta of 0.08, suggesting that its stock price is 92% less volatile than the S&P 500. Comparatively, Lloyds Banking Group has a beta of 0.89, suggesting that its stock price is 11% less volatile than the S&P 500.

Dividends

Agri Bank China pays an annual dividend of $0.62 per share and has a dividend yield of 3.5%. Lloyds Banking Group pays an annual dividend of $0.13 per share and has a dividend yield of 2.4%. Agri Bank China pays out 23.0% of its earnings in the form of a dividend. Lloyds Banking Group pays out 37.1% 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. Agri Bank China is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of recent ratings for Agri Bank China and Lloyds Banking Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Agri Bank China	0	0	0	0	0.00
Lloyds Banking Group	0	5	5	1	2.64

Earnings and Valuation

This table compares Agri Bank China and Lloyds Banking Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Agri Bank China	$195.64 billion	1.27	$39.24 billion	$2.70	6.56
Lloyds Banking Group	$43.81 billion	1.82	$5.65 billion	$0.35	15.45

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

About Agri Bank China

Agricultural Bank of China Limited, together with its subsidiaries, provides banking products and services. The company operates through Corporate Banking, Personal Banking, and Treasury Operations segments. It offers demand, personal call, foreign currency call, time or demand optional, foreign exchange call, foreign exchange time, savings, agreed term, and negotiated deposit accounts, as well as certificates of deposit; and loans, including housing, consumer, business, fixed asset, working capital, real estate, and entrusted syndicated loans, as well as trade finances, guarantees and commitments, and loans with custody of export rebates accounts. The company provides credit card, debit card, payment and settlement, private banking, cash management, investment banking, custody, financial market, and financial institution services, as well as trading and wealth management services; and personal fund collection and automatic transfer services. In addition, it offers agro-related personal and corporate banking products and services; telephone, mobile, self-service, television, and SMS banking services; financial leasing services; fund management services; asset custodian services; and insurance and reinsurance related products and services. The company operates domestic branches, including specialized institutions, training institutes, tier-1 branches, tier-2 branches, tier-1 sub-branches, foundation-level branch outlets and other establishments; overseas branches in Hong Kong, Singapore, Seoul, New York, Dubai International Financial Centre, Tokyo, Frankfurt, Sydney, Luxemburg, Dubai, London, Macao, and Hanoi; and overseas representative offices in Vancouver, Taipei, Sao Paulo, and Dushanbe. The company was founded in 1951 and is based in Beijing, the People's Republic of China.

About Lloyds Banking Group

Lloyds Banking Group plc, together with its subsidiaries, provides a range of banking and financial services in the United Kingdom and internationally. It operates in three segments: Retail; Commercial Banking; and Insurance, Pensions and Investments. The Retail segment offers a range of financial service products, including current accounts, savings, mortgages, motor finance, unsecured loans, leasing solutions, and credit cards to personal customers. The Commercial Banking segment provides lending, transactional banking, working capital management, risk management, and debt financing services to small and medium-sized entities, corporates, and institutions. The Insurance, Pensions, and Investments segment offers insurance, investment, and pension management products and services. It also provides digital banking services. The company offers its products and services under the Lloyds Bank, Halifax, Bank of Scotland, Scottish Widows, MBNA, Schroders Personal Wealth, Black Horse, Lex Autolease, Birmingham Midshires, LDC, AMC, Embark Group, Citra, IWeb, Cavendish Online, and Tusker brand names. Lloyds Banking Group plc was founded in 1695 and is headquartered in London, the United Kingdom.