Head to Head Survey: Shinhan Financial Group (NYSE:SHG) vs. China Construction Bank (OTCMKTS:CICHY)

Shinhan Financial Group (NYSE:SHG) and China Construction Bank (OTCMKTS:CICHY) are both large-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, risk, earnings, institutional ownership, analyst recommendations, profitability and dividends.

Earnings & Valuation

This table compares Shinhan Financial Group and China Construction Bank”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Shinhan Financial Group	$23.83 billion	1.23	$3.48 billion	$9.01	6.83
China Construction Bank	$188.88 billion	1.42	$46.68 billion	$3.60	5.70

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

Risk and Volatility

Shinhan Financial Group has a beta of 0.97, suggesting that its stock price is 3% less volatile than the S&P 500. Comparatively, China Construction Bank has a beta of 0.13, suggesting that its stock price is 87% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for Shinhan Financial Group and China Construction Bank, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Shinhan Financial Group	0	0	1	1	3.50
China Construction Bank	0	1	0	0	2.00

Institutional and Insider Ownership

7.8% of Shinhan Financial Group shares are held by institutional investors. 1.0% of Shinhan Financial Group shares are held by 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 Shinhan Financial Group and China Construction Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Shinhan Financial Group	19.89%	10.87%	0.85%
China Construction Bank	25.63%	9.81%	0.78%

Dividends

Shinhan Financial Group pays an annual dividend of $1.20 per share and has a dividend yield of 1.9%. China Construction Bank pays an annual dividend of $0.80 per share and has a dividend yield of 3.9%. Shinhan Financial Group pays out 13.3% of its earnings in the form of a dividend. China Construction Bank pays out 22.2% 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.

Summary

Shinhan Financial Group beats China Construction Bank on 11 of the 16 factors compared between the two stocks.

About Shinhan Financial Group

Shinhan Financial Group Co., Ltd. provides financial products and services in South Korea and internationally. The company operates through six segments: Banking, Credit Card, Securities, Insurance, Credit, and Others. It offers retail banking services, including demand, savings, and fixed deposit-taking; checking accounts; mortgage and home equity, and retail lending; electronic banking and automatic teller machines (ATM); and bill paying, payroll and check-cashing, currency exchange, and wire fund transfer services. The company also provides corporate banking services, such as investment banking, real estate financing, overseas real estate and development project financing, infrastructure and structured financing, equity/venture investments, mergers and acquisitions consulting; securitization and derivatives services comprising securities and derivative products, and foreign exchange trading; business expansion financing and consulting services; and working capital loans and facilities loans. In addition, it is involved in treasury and investment activities in international capital markets consisting of foreign currency-denominated securities trading, foreign exchange trading and services, trade-related financial services, international factoring services, and foreign banking operations. Further, the company offers real estate trust, investment advisory, venture business investment, life and non-life insurance, trust account management, securities brokerage, and asset management services, as well as leasing and equipment financing, savings banking, loan collection and credit reporting, collective investment administration, private equity investment, and financial system development services. Additionally, it provides transaction history inquiries and fund transfers, opening letters of credit, trade finance, payment and collection management, sales and acquisition settlement, business-to-business settlement, sweeping, pooling, ERP interface, host-to-host banking, SWIFT SCORE, and cash and liquidity management service. Shinhan Financial Group Co., Ltd. was founded in 1982 and is headquartered in Seoul, South Korea.

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.