Critical Review: Bankinter (OTCMKTS:BKNIY) & Bank of China (OTCMKTS:BACHY)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Bankinter	23.00%	17.64%	0.86%
Bank of China	19.65%	7.81%	0.66%

Analyst Recommendations

This is a summary of recent ratings and price targets for Bankinter and Bank of China, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bankinter	1	5	0	1	2.14
Bank of China	0	1	0	0	2.00

Earnings and Valuation

This table compares Bankinter 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
Bankinter	$5.27 billion	N/A	$1.21 billion	$1.35	12.75
Bank of China	$174.63 billion	1.09	$33.08 billion	$2.57	5.76

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

Volatility & Risk

Bankinter has a beta of -0.2, indicating that its stock price is 120% less volatile than the S&P 500. Comparatively, Bank of China has a beta of 0.13, indicating that its stock price is 87% less volatile than the S&P 500.

Dividends

Bankinter pays an annual dividend of $0.47 per share and has a dividend yield of 2.7%. Bank of China pays an annual dividend of $0.55 per share and has a dividend yield of 3.7%. Bankinter pays out 34.8% of its earnings in the form of a dividend. Bank of China pays out 21.4% 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 China is clearly the better dividend stock, given its higher yield and lower payout ratio.

About Bankinter

Bankinter, S.A. provides various banking products and services to individuals and corporate customers, and small- and medium-sized enterprises in Spain. It offers payroll, pension, business, salary, non-salary, youth salary, current, currency, professional, basic, and management accounts; deposit products; and mortgages and loan products, as well as financing services. The company also provides saving and investment products, including profiled funds, sustainable investment funds, other managers funds, pension funds, and themed funds, as well as funds for beginners; regular investment plans; and advisory, customized investment, wealth management, and alternative investment products and services. In addition, it offers accident, home, life, funeral, health, mortgage payment protection, property, personal, and motor insurance products, as well as business insurance products. Further, the company provides various services, such as estate administration, switch, asset management, accounts management, and transfer services, as well as real estate and brokerage services. Additionally, it offers retail, personal, private, commercial, and corporate banking products, as well as remote banking services. The company was formerly known as Banco Intercontinental Español, S.A. and changed its name to Bankinter, S.A. in July 1990. Bankinter, S.A. was incorporated in 1965 and is based in Madrid, Spain.

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.