Mizuho Financial Group (NYSE:MFG) & Bank of Communications (OTCMKTS:BCMXY) Critical Analysis

Mizuho Financial Group (NYSE:MFG) and Bank of Communications (OTCMKTS:BCMXY) are both large-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, profitability, risk, institutional ownership, dividends, valuation and earnings.

Dividends

Mizuho Financial Group pays an annual dividend of $0.15 per share and has a dividend yield of 1.5%. Bank of Communications pays an annual dividend of $0.86 per share and has a dividend yield of 4.0%. Mizuho Financial Group pays out 26.3% of its earnings in the form of a dividend. Bank of Communications pays out 22.2% 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. Bank of Communications is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Mizuho Financial Group and Bank of Communications’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Mizuho Financial Group	12.31%	9.23%	0.35%
Bank of Communications	18.19%	7.70%	0.62%

Earnings & Valuation

This table compares Mizuho Financial Group and Bank of Communications”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mizuho Financial Group	$59.30 billion	2.05	$3.92 billion	$0.57	17.18
Bank of Communications	$75.42 billion	0.85	$13.02 billion	$3.87	5.55

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

Volatility & Risk

Mizuho Financial Group has a beta of 0.37, indicating that its share price is 63% less volatile than the S&P 500. Comparatively, Bank of Communications has a beta of -0.17, indicating that its share price is 117% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Mizuho Financial Group and Bank of Communications, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mizuho Financial Group	0	1	1	0	2.50
Bank of Communications	0	0	0	0	0.00

Institutional & Insider Ownership

3.3% of Mizuho Financial Group shares are held by institutional investors. 0.0% of Mizuho Financial Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Mizuho Financial Group beats Bank of Communications on 8 of the 15 factors compared between the two stocks.

About Mizuho Financial Group

Mizuho Financial Group, Inc., together with its subsidiaries, engages in banking, trust, securities, and other businesses related to financial services in Japan, the Americas, Europe, Asia/Oceania, and internationally. It operates through Retail & Business Banking Company, Corporate & Institutional Company, Global Corporate Company, Global Markets Company, Asset Management Company, and Others segments. The company provides deposit products; syndicated, housing, and card loans; business matching services; and advisory services related to overseas expansions, and mergers and acquisitions-related services. It also offers consulting services, including asset management and asset succession; payroll services; and sells lottery tickets issued by prefectures and ordinance-designated cities. In addition, it offers fund management, underwriting of equity and bonds, risk hedging products, etc. for corporate customers; solutions based on capital management, business strategy, and financial strategy; real estate services; advisory services and solutions, such as advice on proposals on various investment products to financial institutions; and financial services that include funding support and public bonds underwriting. Further, the company offers corporate finance and transaction banking srvices; sales and trading services; investment products; pension funds; and ALM and investment services, including stable capital raising and balance sheet management, as well as management of fixed income, equity, and other securities portfolios. Additionally, the company provides online banking, cash management solutions, currency transaction, trade finance, custody, yen correspondence settlement, and research and consulting services; trust, securitization and structured finance, and stock transfers; and private banking and information technology-related services. Mizuho Financial Group, Inc. was founded in 2000 and is headquartered in Tokyo, Japan.

About Bank of Communications

Bank of Communications Co., Ltd. provides commercial banking products and services in China. The company offers savings deposit products, including demand deposits, lump-sum deposits and withdrawal, time deposit of small savings for lump-sum withdrawal, interest withdrawal on principal deposited, time-demand deposit, call deposit, swap management, and education deposit; personal certificate of deposit; salary financing A; and foreign currency deposit. It also provides credit, quasi-credit, and debit cards; new housing and second-hand mortgage loans and unsecured personal loans; personal wealth management advisor services; and precious metal and commodity trading services. In addition, the company offers corporate structured deposit and corporate certificate of deposit; corporate cash management; industrial chain finance program comprising prepayment financing, inventory financing, accounts receivable financing and accounts payable financing; syndicated loans; corporation overdraft; investment banking services; and offshore banking services, such as repayment financing, inventory financing, accounts receivable financing and accounts payable financing, and forex currencies. Further, it provides bond account activation, bond distribution, and transaction services; related bond escrow and settlement, pledge registration, and principal and interest payment services; training and consulting services for cooperative banks; cross-border inter-bank payments system services; consignment sales of precious metal products; bond underwriting distribution; third party bond depository services; bank derivatives transfer; b-share transfer; bankfutures transfer; standard warehouse warrant pledged financing; institutional investment consulting, wealth management, and insurance services; and clearing and settlement services for future markets. The company was founded in 1908 and is headquartered in Shanghai, the People’s Republic of China.