Credicorp (NYSE:BAP) vs. China Construction Bank (OTCMKTS:CICHY) Critical Comparison

China Construction Bank (OTCMKTS:CICHY) and Credicorp (NYSE:BAP) are both large-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, analyst recommendations, profitability, valuation, dividends, institutional ownership and earnings.

Earnings & Valuation

This table compares China Construction Bank and Credicorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
China Construction Bank	$188.88 billion	1.41	$46.68 billion	$3.60	5.65
Credicorp	$8.01 billion	3.19	$1.94 billion	$24.31	13.23

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

Volatility & Risk

China Construction Bank has a beta of 0.13, suggesting that its share price is 87% less volatile than the S&P 500. Comparatively, Credicorp has a beta of 0.87, suggesting that its share price is 13% less volatile than the S&P 500.

Dividends

China Construction Bank pays an annual dividend of $0.80 per share and has a dividend yield of 3.9%. Credicorp pays an annual dividend of $11.01 per share and has a dividend yield of 3.4%. China Construction Bank pays out 22.2% of its earnings in the form of a dividend. Credicorp pays out 45.3% 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. Credicorp has increased its dividend for 3 consecutive years. China Construction Bank is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares China Construction Bank and Credicorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
China Construction Bank	25.63%	9.81%	0.78%
Credicorp	24.53%	20.43%	2.86%

Institutional and Insider Ownership

89.8% of Credicorp shares are held by institutional investors. 15.9% of Credicorp shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current recommendations for China Construction Bank and Credicorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
China Construction Bank	0	1	0	0	2.00
Credicorp	0	3	4	0	2.57

Credicorp has a consensus target price of $297.60, suggesting a potential downside of 7.49%. Given Credicorp’s stronger consensus rating and higher possible upside, analysts clearly believe Credicorp is more favorable than China Construction Bank.

Summary

Credicorp beats China Construction Bank on 12 of the 17 factors compared between the two stocks.

About China Construction Bank

China Construction Bank Corporation provides various banking and related financial services to individuals and corporate customers in the People's Republic of China and internationally. It operates through Corporate Finance Business, Personal Finance Business, Treasury and Asset Management Business, and Others segments. The company accepts various deposits, such as foreign currency, all in one accounts, RMB, corporate term and notification, and corporate demand deposits, as well corporate deposits by agreement. Its loan products include personal business, car, and housing loans; and SME, traditional credit, commercial draft, buyer credit, and RMB credit line loans. The company also offers credit cards; physical gold for personal investment and personal gold accounts; foreign exchange services; certificate treasury and savings bonds, securities deposit accounts, and securities services, as well as bank-securities transfer and book-entry treasury bond over the counter transaction services; and wealth management products. In addition, it provides collection, salaries payment, third-party collection and payment, insurance agency, and remittance services; international settlement and financing, and FI services; securities and fund settlement services; guarantee-based, consulting and advising, and factoring services; fund custody services; and e-banking services. Further, the company offers institutional services comprising services for government agencies, social security, banks cooperation, bank-securities cooperation, bank-insurance cooperation, and services for non-banking financial institutions. China Construction Bank Corporation was founded in 1954 and is headquartered in Beijing, the People's Republic of China.

About Credicorp

Credicorp Ltd. provides various financial, insurance, and health services and products primarily in Peru and internationally. It operates through Universal Banking, Insurance and Pensions, Microfinance, and Investment Banking and Equity Management segments. The Universal Banking segment grants various credits and financial instruments to individuals and legal entities; and various deposits and current accounts. The Insurance and Pensions segment issues insurance policies to cover losses in commercial property, transport, marine vessels, automobiles, life, health, and pensions; and management services for private pension funds. The Microfinance segment provides management of loans, deposits, and current accounts for small and microenterprises. The Investment Banking and Equity Management segment is involved in provision of brokerage and investment management services for corporations, institutional investors, governments, and foundations; structuring and placement of issues in the primary market; execution and negotiation of transactions in the secondary market; and structuring of securitization processes for corporate customers and manages mutual funds. The company was founded in 1889 and is headquartered in Lima, Peru.