Head-To-Head Comparison: China Merchants Bank (OTCMKTS:CIHKY) vs. National Australia Bank (OTCMKTS:NABZY)

China Merchants Bank (OTCMKTS:CIHKY) and National Australia Bank (OTCMKTS:NABZY) are both large-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, earnings, valuation, risk, profitability, analyst recommendations and dividends.

Analyst Ratings

This is a summary of current recommendations and price targets for China Merchants Bank and National Australia Bank, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
China Merchants Bank	0	1	0	0	2.00
National Australia Bank	2	1	0	2	2.40

National Australia Bank has a consensus target price of $38.00, suggesting a potential upside of 199.68%. Given National Australia Bank’s stronger consensus rating and higher probable upside, analysts clearly believe National Australia Bank is more favorable than China Merchants Bank.

Earnings and Valuation

This table compares China Merchants Bank and National Australia Bank”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	2.36	$20.89 billion	$4.03	7.56
National Australia Bank	$38.78 billion	2.00	$4.35 billion	N/A	N/A

China Merchants Bank has higher revenue and earnings than National Australia Bank.

Dividends

China Merchants Bank pays an annual dividend of $0.57 per share and has a dividend yield of 1.9%. National Australia Bank pays an annual dividend of $0.57 per share and has a dividend yield of 4.5%. China Merchants Bank pays out 14.1% of its earnings in the form of a dividend.

Profitability

This table compares China Merchants Bank and National Australia Bank’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%
National Australia Bank	N/A	N/A	N/A

Volatility & Risk

China Merchants Bank has a beta of 0.2, suggesting that its stock price is 80% less volatile than the S&P 500. Comparatively, National Australia Bank has a beta of 1.05, suggesting that its stock price is 5% more volatile than the S&P 500.

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 National Australia Bank

National Australia Bank Limited provides financial services to individuals and businesses in Australia, New Zealand, and internationally. The company operates through Business and Private Banking; Personal Banking; Corporate and Institutional Banking; New Zealand Banking; and Corporate Functions and Other segments. It accepts transaction accounts, savings accounts, debit cards, and term deposits; and specialized accounts, such as foreign currency, business interest, cash maximiser, farm management, community free saver, statutory trust, and project bank accounts, as well as farm management deposits. In addition, the company provides home loans, personal loans, and business loans; vehicle and equipment finance; and trade and invoice finance, as well as business overdrafts and bank guarantees. Further, it offers insurance products consisting of home and content, landlord, travel, car, caravan and trailer, life, and business insurance products; and pension, self-managed super funds, cash management, and financial planning and advisory services. Additionally, the company provides investment products; credit, debit, and business cards; payments and merchant services; online and internet banking services; small business services; international and foreign exchange solutions; and industry specific banking services. The company was founded in 1834 and is based in Melbourne, Australia.