Nordea Bank (OTCMKTS:NRDBY) & Bank of China (OTCMKTS:BACHY) Head to Head Analysis

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

Analyst Ratings

This is a breakdown of current recommendations for Bank of China and Nordea Bank, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bank of China	0	1	0	0	2.00
Nordea Bank	1	3	2	1	2.43

Valuation and Earnings

This table compares Bank of China and Nordea Bank”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bank of China	$174.63 billion	1.09	$33.08 billion	$2.57	5.74
Nordea Bank	$23.46 billion	2.84	$5.48 billion	$1.58	12.28

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

Institutional and Insider Ownership

0.0% of Nordea Bank shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Dividends

Bank of China pays an annual dividend of $0.55 per share and has a dividend yield of 3.7%. Nordea Bank pays an annual dividend of $0.47 per share and has a dividend yield of 2.4%. Bank of China pays out 21.4% of its earnings in the form of a dividend. Nordea Bank pays out 29.7% 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Bank of China	19.65%	7.81%	0.66%
Nordea Bank	22.36%	15.61%	0.75%

Risk and Volatility

Bank of China has a beta of 0.13, meaning that its share price is 87% less volatile than the S&P 500. Comparatively, Nordea Bank has a beta of 0.62, meaning that its share price is 38% less volatile than the S&P 500.

Summary

Nordea Bank beats Bank of China on 10 of the 15 factors compared between the two stocks.

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.

About Nordea Bank

Nordea Bank Abp offers banking products and services in Sweden, Finland, Norway, Denmark, and internationally. It operates through Personal Banking, Business Banking, Large Corporates & Institutions, and Asset & Wealth Management segments. The Personal Banking segment provides various financial services to customers through mobile banking, over the phone, online meetings, and branch offices. The Business Banking segment offers payments, cash management, cards, working capital management, and cards and finance solutions to corporate and personal customers. The Large Corporates & Institutions segment provides financing, cash management and payment, investment banking, capital market products, and securities services to corporate and institutional customers. The Asset & Wealth Management segment offers investment, savings, and risk management solutions to high net worth individuals and institutional investors. It also offers account-based products, such as lending and deposit; project finance services, asset-based financing through leasing, hire purchase, and factoring, as well as sales to finance partners, such as dealers, vendors, and retailers; financial instruments or arrangement for financial instruments, including currencies, commodities, stocks, and bonds; and asset management, including investment funds, discretionary management, portfolio advice, equity trading, and pension accounts, as well as life insurance and pension products and services. Nordea Bank Abp was founded in 1820 and is headquartered in Helsinki, Finland.