Comparing VersaBank (NASDAQ:VBNK) & Commonwealth Bank of Australia (OTCMKTS:CMWAY)

VersaBank (NASDAQ:VBNKGet Rating) and Commonwealth Bank of Australia (OTCMKTS:CMWAYGet Rating) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, valuation, institutional ownership, risk, dividends, earnings and analyst recommendations.

Analyst Ratings

This is a summary of current ratings and recommmendations for VersaBank and Commonwealth Bank of Australia, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
VersaBank 0 0 0 1 4.00
Commonwealth Bank of Australia 0 1 1 0 2.50

Commonwealth Bank of Australia has a consensus price target of $98.50, indicating a potential upside of 30.26%. Given Commonwealth Bank of Australia’s higher possible upside, analysts clearly believe Commonwealth Bank of Australia is more favorable than VersaBank.

Dividends

VersaBank pays an annual dividend of $0.08 per share and has a dividend yield of 0.7%. Commonwealth Bank of Australia pays an annual dividend of $2.59 per share and has a dividend yield of 3.4%. VersaBank pays out 10.8% of its earnings in the form of a dividend.

Insider & Institutional Ownership

24.3% of VersaBank shares are held by institutional investors. Comparatively, 0.0% of Commonwealth Bank of Australia shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares VersaBank and Commonwealth Bank of Australia’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
VersaBank $75.30 million 3.95 $17.80 million $0.74 14.64
Commonwealth Bank of Australia $23.09 billion 5.59 $6.47 billion N/A N/A

Commonwealth Bank of Australia has higher revenue and earnings than VersaBank.

Profitability

This table compares VersaBank and Commonwealth Bank of Australia’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
VersaBank 23.07% 10.16% 1.28%
Commonwealth Bank of Australia N/A N/A N/A

Summary

Commonwealth Bank of Australia beats VersaBank on 7 of the 13 factors compared between the two stocks.

About VersaBank (Get Rating)

VersaBank, a schedule I chartered bank, provides various banking products and services in Canada. The company offers deposit products, such as guaranteed investment certificates, registered retirement savings plans, daily interest savings accounts, and tax-free savings accounts, as well as deposit insurance products. It also provides lending services, including point of sale financing that involves purchasing loan and lease receivables from finance companies operating in various industries; and commercial banking services comprising commercial real estate, public sector/infrastructure financing, condominium financing, and residential mortgages. The company was formerly known as Pacific & Western Bank of Canada and changed its name to VersaBank in May 2016. VersaBank was incorporated in 1979 and is headquartered in London, Canada.

About Commonwealth Bank of Australia (Get Rating)

Commonwealth Bank of Australia provides integrated financial services in Australia, New Zealand, and internationally. It operates through Retail Banking Services, Business Banking, Institutional Banking and Markets, and New Zealand segments. The company offers retail, premium, business, offshore, and institutional banking services; and funds management, superannuation, and share broking products and services, as well as car, health, life, income protection, and travel insurance. It offers transaction, savings, foreign currency accounts; term deposits; personal and business loans; overdrafts; equipment finance; credit cards; international payment and trade; and private banking services, as well as home and car loans, and importer finance products. The company also provides advisory services for high net worth individuals; equities trading and margin lending services; debt capital, transaction banking, working capital, and risk management services; and international and foreign exchange services. As of June 30, 2021, it operated 875 branches and 2,492 ATMs. The company was founded in 1911 and is based in Sydney, Australia.

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