Contrasting China Merchants Bank (OTCMKTS:CIHKY) and Banco Bilbao Viscaya Argentaria (NYSE:BBVA)

China Merchants Bank (OTCMKTS:CIHKY) and Banco Bilbao Viscaya Argentaria (NYSE:BBVA) are both large-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, dividends, profitability, valuation, institutional ownership, earnings and analyst recommendations.

Profitability

This table compares China Merchants Bank and Banco Bilbao Viscaya Argentaria’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
China Merchants Bank	32.40%	12.14%	1.21%
Banco Bilbao Viscaya Argentaria	28.21%	17.65%	1.29%

Institutional and Insider Ownership

3.0% of Banco Bilbao Viscaya Argentaria shares are owned by institutional investors. 0.0% of Banco Bilbao Viscaya Argentaria shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Dividends

China Merchants Bank pays an annual dividend of $1.19 per share and has a dividend yield of 4.0%. Banco Bilbao Viscaya Argentaria pays an annual dividend of $1.14 per share and has a dividend yield of 4.5%. China Merchants Bank pays out 29.5% of its earnings in the form of a dividend. Banco Bilbao Viscaya Argentaria pays out 54.3% 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.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for China Merchants Bank and Banco Bilbao Viscaya Argentaria, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
China Merchants Bank	0	1	0	0	2.00
Banco Bilbao Viscaya Argentaria	0	6	1	0	2.14

Earnings & Valuation

This table compares China Merchants Bank and Banco Bilbao Viscaya Argentaria”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
China Merchants Bank	$65.04 billion	2.33	$20.89 billion	$4.03	7.46
Banco Bilbao Viscaya Argentaria	$41.77 billion	3.44	$11.89 billion	$2.10	11.98

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

Risk and Volatility

China Merchants Bank has a beta of 0.21, suggesting that its stock price is 79% less volatile than the S&P 500. Comparatively, Banco Bilbao Viscaya Argentaria has a beta of 0.8, suggesting that its stock price is 20% less volatile than the S&P 500.

Summary

Banco Bilbao Viscaya Argentaria beats China Merchants Bank on 10 of the 15 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 Banco Bilbao Viscaya Argentaria

Banco Bilbao Vizcaya Argentaria, S.A. provides retail banking, wholesale banking, and asset management services in the United States, Spain, Mexico, Turkey, South America, and internationally. The company offers savings account, demand deposits, and time deposits; and loan products, such as residential mortgages, other households, credit card loans, loans to enterprises and public sector, as well as consumer finance. It provides insurance and asset management business, including corporate, commercial, SME, payment systems, retail, private and investment banking, pension and life insurance, leasing, factoring, and brokerage. The company provides its products through online and mobile channels. Banco Bilbao Vizcaya Argentaria, S.A. was founded in 1857 and is headquartered in Bilbao, Spain.