Critical Analysis: CPB (NYSE:CPF) and China Minsheng (OTCMKTS:CMAKY)

CPB (NYSE:CPF) and China Minsheng (OTCMKTS:CMAKY) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, risk, valuation, profitability, earnings, institutional ownership and dividends.

Institutional & Insider Ownership

88.4% of CPB shares are owned by institutional investors. 1.7% of CPB shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares CPB and China Minsheng’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CPB	22.52%	14.20%	1.13%
China Minsheng	10.72%	3.89%	0.35%

Dividends

CPB pays an annual dividend of $1.20 per share and has a dividend yield of 3.2%. China Minsheng pays an annual dividend of $0.25 per share and has a dividend yield of 6.3%. CPB pays out 38.5% of its earnings in the form of a dividend. China Minsheng pays out 29.4% 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. CPB has increased its dividend for 1 consecutive years. China Minsheng is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for CPB and China Minsheng, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CPB	0	3	3	0	2.50
China Minsheng	0	1	0	0	2.00

CPB currently has a consensus price target of $39.00, suggesting a potential upside of 3.24%. Given CPB’s stronger consensus rating and higher probable upside, equities research analysts plainly believe CPB is more favorable than China Minsheng.

Earnings and Valuation

This table compares CPB and China Minsheng”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CPB	$297.53 million	3.27	$77.48 million	$3.12	12.11
China Minsheng	$33.55 billion	0.52	$4.25 billion	$0.85	4.68

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

Risk and Volatility

CPB has a beta of 0.87, indicating that its share price is 13% less volatile than the S&P 500. Comparatively, China Minsheng has a beta of 0.25, indicating that its share price is 75% less volatile than the S&P 500.

Summary

CPB beats China Minsheng on 13 of the 17 factors compared between the two stocks.

About CPB

Central Pacific Financial Corp. operates as the bank holding company for Central Pacific Bank that provides a range of commercial banking products and services to businesses, professionals, and individuals in the United States. It offers various deposit products and services, including checking, savings and time deposits, cash management and digital banking, trust, and retail brokerage services, as well as money market accounts and certificates of deposit. The company also provides various lending activities, such as commercial, commercial and residential mortgage, home equity, and consumer loans; and other products and services comprising debit cards, internet and mobile banking, cash management services, full-service ATMs, safe deposit boxes, international banking services, night depository facilities, foreign exchange, and wire transfers. In addition, it offers wealth management products and services that include non-deposit investment products, annuities, insurance, investment management, asset custody and general consultation, and planning services. The company was founded in 1954 and is headquartered in Honolulu, Hawaii.

About China Minsheng

China Minsheng Banking Corp., Ltd. provides banking products and services for individuals, small and micro-enterprises, corporate customers, government agencies, and financial institutions in the People's Republic of China. The company operates through Corporate Banking, Retail Banking, and Others segments. Its deposit products include saving accounts, deposit books and certificates, contracted deposits, agreement deposits, call deposits, corporate term deposits, and corporate current deposits. The company also offers personal housing mortgage, individual automobile purchase, household composite consumption, micro-credit products for individuals, medium and long term, and short-term working capital loans; and debit and credit cards. In addition, it provides appointed and domestic remittance, payment and collection agent, clearing, safe deposit boxes, VIP, and salary and welfare agent card services, as well as internet, mobile, telephone, and self-serve banking services. Further, the company offers gross settlement; wages distribution agency and letter of guarantee; cash management; trade finance; industrial chain finance; individual forex settlement, forex remittance, travelers promissory notes, collection, individual deposit certificate, and guarantee letter products; and comprehensive credit granting, forex settlement and sale, financial product investment, asset management, and trust financing services. Additionally, it provides convenient finance and investment banking services, as well as non-financial services in the education, business travel, traveler, art, luxury life, health, club, and isports areas. The company operates through branch-level institutions, business outlets, community sub-branches, and small business sub-branches. China Minsheng Banking Corp., Ltd. was incorporated in 1996 and is headquartered in Beijing, the People's Republic of China.