China Merchants Bank (OTCMKTS:CIHKY – Get Free Report) and Barclays (NYSE:BCS – Get Free Report) are both large-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, profitability, institutional ownership, valuation, earnings, analyst recommendations and dividends.
Dividends
China Merchants Bank pays an annual dividend of $0.57 per share and has a dividend yield of 1.9%. Barclays pays an annual dividend of $0.58 per share and has a dividend yield of 2.5%. China Merchants Bank pays out 14.1% of its earnings in the form of a dividend. Barclays pays out 24.2% 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.
Profitability
This table compares China Merchants Bank and Barclays’ 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% |
| Barclays | 21.10% | 8.12% | 0.39% |
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| China Merchants Bank | 0 | 1 | 0 | 0 | 2.00 |
| Barclays | 0 | 4 | 3 | 0 | 2.43 |
Institutional & Insider Ownership
3.4% of Barclays shares are owned by institutional investors. 0.0% of Barclays shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Valuation and Earnings
This table compares China Merchants Bank and Barclays”s 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 | 2.30 | $20.89 billion | $4.03 | 7.37 |
| Barclays | $38.42 billion | 2.04 | $9.46 billion | $2.40 | 9.56 |
China Merchants Bank has higher revenue and earnings than Barclays. China Merchants Bank is trading at a lower price-to-earnings ratio than Barclays, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
China Merchants Bank has a beta of 0.2, suggesting that its stock price is 80% less volatile than the S&P 500. Comparatively, Barclays has a beta of 1.01, suggesting that its stock price is 1% more volatile than the S&P 500.
Summary
China Merchants Bank beats Barclays on 8 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 Barclays
Barclays PLC provides various financial services in the United Kingdom, Europe, the Americas, Africa, the Middle East, and Asia. The company operates through Barclays UK and Barclays International division segments. It offers financial services, such as retail banking, credit cards, wholesale banking, investment banking, wealth management, and investment management services. In addition, the company engages in securities dealing activities. The company was formerly known as Barclays Bank Limited and changed its name to Barclays PLC in January 1985. Barclays PLC was founded in 1690 and is headquartered in London, the United Kingdom.
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