Head-To-Head Analysis: China Construction Bank (OTCMKTS:CICHY) & CVB Financial (NASDAQ:CVBF)

CVB Financial (NASDAQ:CVBF) and China Construction Bank (OTCMKTS:CICHY) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, dividends, valuation, institutional ownership and earnings.

Insider and Institutional Ownership

74.2% of CVB Financial shares are held by institutional investors. 6.4% of CVB Financial shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

CVB Financial pays an annual dividend of $0.80 per share and has a dividend yield of 3.5%. China Construction Bank pays an annual dividend of $0.94 per share and has a dividend yield of 3.9%. CVB Financial pays out 55.2% of its earnings in the form of a dividend. China Construction Bank pays out 25.3% 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. China Construction Bank is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares CVB Financial and China Construction Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CVB Financial	29.02%	9.21%	1.36%
China Construction Bank	27.65%	9.82%	0.78%

Valuation and Earnings

This table compares CVB Financial and China Construction Bank”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CVB Financial	$648.47 million	6.17	$209.30 million	$1.45	15.67
China Construction Bank	$181.98 billion	1.75	$47.15 billion	$3.72	6.54

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

Analyst Recommendations

This is a summary of recent recommendations and price targets for CVB Financial and China Construction Bank, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CVB Financial	0	1	4	0	2.80
China Construction Bank	0	1	0	0	2.00

CVB Financial presently has a consensus target price of $26.25, indicating a potential upside of 15.54%. Given CVB Financial’s stronger consensus rating and higher probable upside, analysts clearly believe CVB Financial is more favorable than China Construction Bank.

Volatility and Risk

CVB Financial has a beta of 0.64, meaning that its share price is 36% less volatile than the S&P 500. Comparatively, China Construction Bank has a beta of 0.11, meaning that its share price is 89% less volatile than the S&P 500.

Summary

CVB Financial beats China Construction Bank on 10 of the 16 factors compared between the two stocks.

About CVB Financial

CVB Financial Corp. operates as a bank holding company for Citizens Business Bank, a state-chartered bank that provides banking and financial services to small to mid-sized businesses and individuals. It offers checking, savings, money market, and time certificates of deposit products for business and personal accounts; and serves as a federal tax depository for business customers. The company also provides commercial lending products comprising lines of credit and other working capital financing, accounts receivable lending, and letters of credit; agriculture loans to finance the operating needs of wholesale dairy farm operations, cattle feeders, livestock raisers, and farmers; lease financing services for municipal governments; commercial real estate and construction loans; and consumer financing products, including automobile leasing and financing, lines of credit, credit cards, home mortgages, and home equity loans and lines of credit. In addition, it offers various specialized services, such as treasury management systems for monitoring cash flow, merchant card processing program, armored pick-up and delivery, payroll services, remote deposit capture, electronic funds transfers, wires and automated clearinghouse, and online account access. Further, the company provides trust services, such as fiduciary services, mutual funds, annuities, 401(k) plans, and individual investment accounts. CVB Financial Corp. was founded in 1974 and is headquartered in Ontario, California.

About China Construction Bank

China Construction Bank Corporation provides various banking and related financial services to individuals and corporate customers in the People's Republic of China and internationally. It operates through Corporate Finance Business, Personal Finance Business, Treasury and Asset Management Business, and Others segments. The company accepts various deposits, such as foreign currency, all in one accounts, RMB, corporate term and notification, and corporate demand deposits, as well corporate deposits by agreement. Its loan products include personal business, car, and housing loans; and SME, traditional credit, commercial draft, buyer credit, and RMB credit line loans. The company also offers credit cards; physical gold for personal investment and personal gold accounts; foreign exchange services; certificate treasury and savings bonds, securities deposit accounts, and securities services, as well as bank-securities transfer and book-entry treasury bond over the counter transaction services; and wealth management products. In addition, it provides collection, salaries payment, third-party collection and payment, insurance agency, and remittance services; international settlement and financing, and FI services; securities and fund settlement services; guarantee-based, consulting and advising, and factoring services; fund custody services; and e-banking services. Further, the company offers institutional services comprising services for government agencies, social security, banks cooperation, bank-securities cooperation, bank-insurance cooperation, and services for non-banking financial institutions. China Construction Bank Corporation was founded in 1954 and is headquartered in Beijing, the People's Republic of China.