Industrial & Commercial Bank of China Ltd. (OTCMKTS:IDCBY – Get Free Report) and Bank of America (NYSE:BAC – Get Free Report) are both large-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, dividends, risk, valuation, profitability and earnings.
Dividends
Industrial & Commercial Bank of China Ltd. pays an annual dividend of $0.67 per share and has a dividend yield of 3.4%. Bank of America pays an annual dividend of $1.28 per share and has a dividend yield of 2.6%. Industrial & Commercial Bank of China Ltd. pays out 22.2% of its earnings in the form of a dividend. Bank of America pays out 30.4% 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. Bank of America has raised its dividend for 11 consecutive years. Industrial & Commercial Bank of China Ltd. is clearly the better dividend stock, given its higher yield and lower payout ratio.
Insider & Institutional Ownership
70.7% of Bank of America shares are owned by institutional investors. 0.3% of Bank of America shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Earnings & Valuation
This table compares Industrial & Commercial Bank of China Ltd. and Bank of America”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Industrial & Commercial Bank of China Ltd. | $208.16 billion | 1.70 | $51.27 billion | $3.02 | 6.59 |
| Bank of America | $191.57 billion | 1.81 | $30.51 billion | $4.21 | 11.75 |
Industrial & Commercial Bank of China Ltd. has higher revenue and earnings than Bank of America. Industrial & Commercial Bank of China Ltd. is trading at a lower price-to-earnings ratio than Bank of America, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Industrial & Commercial Bank of China Ltd. has a beta of 0.09, suggesting that its share price is 91% less volatile than the S&P 500. Comparatively, Bank of America has a beta of 1.21, suggesting that its share price is 21% more volatile than the S&P 500.
Profitability
This table compares Industrial & Commercial Bank of China Ltd. and Bank of America’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Industrial & Commercial Bank of China Ltd. | 24.67% | 8.75% | 0.69% |
| Bank of America | 16.80% | 12.15% | 0.97% |
Analyst Recommendations
This is a breakdown of recent recommendations and price targets for Industrial & Commercial Bank of China Ltd. and Bank of America, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Industrial & Commercial Bank of China Ltd. | 0 | 1 | 0 | 0 | 2.00 |
| Bank of America | 0 | 6 | 18 | 1 | 2.80 |
Bank of America has a consensus price target of $62.48, suggesting a potential upside of 26.29%. Given Bank of America’s stronger consensus rating and higher possible upside, analysts plainly believe Bank of America is more favorable than Industrial & Commercial Bank of China Ltd..
Summary
Bank of America beats Industrial & Commercial Bank of China Ltd. on 13 of the 18 factors compared between the two stocks.
About Industrial & Commercial Bank of China Ltd.
Industrial and Commercial Bank of China Limited, together with its subsidiaries, provides banking products and services in the People's Republic of China and internationally. The company operates through Corporate Banking, Personal Banking, and Treasury Operations segments. The Corporate Banking segment offers financial products and services to corporations, government agencies, and financial institutions. Its products and services include trade financing, deposit, corporate wealth management, custody, and various corporate intermediary services, as well as corporate loans. Its Personal Banking segment provides financial products and services to individual customers. This segment's products and services comprise personal loans and cards, deposits, and personal wealth management and intermediary services. The Treasury Business segment is involved in the money market transactions, investment securities, and proprietary and foreign exchange transactions businesses. It also offers e-banking services, investment banking, financial leasing, and insurance services. Industrial and Commercial Bank of China Limited was incorporated in 1984 and is based in Beijing, the People's Republic of China.
About Bank of America
Bank of America Corporation, through its subsidiaries, provides banking and financial products and services for individual consumers, small and middle-market businesses, institutional investors, large corporations, and governments worldwide. It operates in four segments: Consumer Banking, Global Wealth & Investment Management (GWIM), Global Banking, and Global Markets. The Consumer Banking segment offers traditional and money market savings accounts, certificates of deposit and IRAs, non-interest and interest-bearing checking accounts, and investment accounts and products; credit and debit cards; residential mortgages, and home equity loans; and direct and indirect loans, such as automotive, recreational vehicle, and consumer personal loans. The GWIM segment provides investment management, brokerage, banking, and trust and retirement products and services; wealth management solutions; and customized solutions, including specialty asset management services. The Global Banking segment offers lending products and services, including commercial loans, leases, commitment facilities, trade finance, and commercial real estate and asset-based lending; treasury solutions, such as treasury management, foreign exchange, short-term investing options, and merchant services; working capital management solutions; debt and equity underwriting and distribution, and merger-related and other advisory services; and fixed-income and equity research, and certain market-based services. The Global Markets segment provides market-making, financing, securities clearing, settlement, and custody services; securities and derivative products; and risk management products using interest rate, equity, credit, currency and commodity derivatives, foreign exchange, fixed-income, and mortgage-related products. Bank of America Corporation was founded in 1784 and is based in Charlotte, North Carolina.
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