Head to Head Analysis: Citizens (NASDAQ:CIZN) & Bank of China (OTCMKTS:BACHY)

Citizens (NASDAQ:CIZN) and Bank of China (OTCMKTS:BACHY) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, profitability, earnings, institutional ownership and dividends.

Institutional and Insider Ownership

9.7% of Citizens shares are owned by institutional investors. 8.9% of Citizens shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and price targets for Citizens and Bank of China, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Citizens	0	0	5	0	3.00
Bank of China	0	1	0	0	2.00

Citizens currently has a consensus price target of $14.17, indicating a potential upside of 54.83%. Given Citizens’ stronger consensus rating and higher probable upside, research analysts clearly believe Citizens is more favorable than Bank of China.

Dividends

Citizens pays an annual dividend of $0.08 per share and has a dividend yield of 0.9%. Bank of China pays an annual dividend of $0.63 per share and has a dividend yield of 3.4%. Citizens pays out 4.8% of its earnings in the form of a dividend. Bank of China pays out 24.1% 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. Citizens has raised its dividend for 1 consecutive years.

Volatility and Risk

Citizens has a beta of 0.09, indicating that its stock price is 91% less volatile than the S&P 500. Comparatively, Bank of China has a beta of 0.07, indicating that its stock price is 93% less volatile than the S&P 500.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Citizens	$40.95 million	1.27	$5.49 million	$1.68	5.45
Bank of China	$169.73 billion	1.42	$33.81 billion	$2.61	7.19

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Citizens	7.00%	11.28%	0.37%
Bank of China	20.44%	7.88%	0.68%

Summary

Citizens beats Bank of China on 10 of the 17 factors compared between the two stocks.

About Citizens

Citizens Holding Company operates as the bank holding company for The Citizens Bank of Philadelphia that provides various commercial and personal banking products and services. It offers demand deposits; and savings and time deposit accounts. The company also provides secured and unsecured loans; mortgage loans; single and multi-family housing, farm, residential and commercial construction, and commercial real estate loans; commercial, industrial, and agricultural production loans; and consumer loans, as well as issues letters of credit. In addition, it offers personal and corporate trust services; credit life and title insurance; and online and mobile banking services. The company was founded in 1908 and is headquartered in Philadelphia, Mississippi.

About Bank of China

Bank of China Limited, together with its subsidiaries, provides various banking and financial services in Chinese Mainland, Hong Kong, Macao, Taiwan, and internationally. It operates through six segments: Corporate Banking, Personal Banking, Treasury Operations, Investment Banking, Insurance, and Other. The Corporate Banking segment provides current accounts, deposits, overdrafts, loans, payments and settlements, trade-related products, and other credit facilities, as well as foreign currency, derivative, and wealth management products for corporate customers, government authorities, and financial institutions. The Personal Banking segment offers savings deposits, personal loans, credit cards and debit cards, payments and settlements, wealth management, and funds and insurance agency services to retail customers. The Treasury Operations segment offers foreign exchange transactions, customer-based interest rate, and foreign exchange derivative transactions, as well as money market transactions, proprietary trading, and asset and liability management. The Investment Banking segment provides debt and equity underwriting and financial advisory, sale and trading of securities, stock brokerage, investment research, asset management services, and private equity investment services. The Insurance segment provides underwriting services for general and life insurance business, and insurance agency services. In addition, the company operates debt-to-equity swaps and other supporting, and aircraft and financial leasing business. The company was founded in 1912 and is headquartered in Beijing, China.