Contrasting China Minsheng Banking (OTCMKTS:CGMBF) & CapStar Financial (NASDAQ:CSTR)

China Minsheng Banking (OTCMKTS:CGMBF) and CapStar Financial (NASDAQ:CSTR) are both financial services companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, earnings, profitability, dividends, analyst recommendations, risk and institutional ownership.

Dividends

China Minsheng Banking pays an annual dividend of $0.10 per share and has a dividend yield of 32.7%. CapStar Financial pays an annual dividend of $0.44 per share and has a dividend yield of 2.2%. China Minsheng Banking pays out 8.0% of its earnings in the form of a dividend. CapStar Financial pays out 31.2% 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. CapStar Financial has increased its dividend for 3 consecutive years. China Minsheng Banking is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares China Minsheng Banking and CapStar Financial’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
China Minsheng Banking	N/A	N/A	N/A	$1.27	0.24
CapStar Financial	$112.03 million	3.72	$29.80 million	$1.41	14.18

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

Institutional & Insider Ownership

3.6% of China Minsheng Banking shares are owned by institutional investors. Comparatively, 52.2% of CapStar Financial shares are owned by institutional investors. 9.2% of CapStar Financial 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.

Analyst Ratings

This is a summary of recent ratings and recommmendations for China Minsheng Banking and CapStar Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
China Minsheng Banking	0	0	0	0	N/A
CapStar Financial	0	0	0	0	N/A

CapStar Financial has a consensus price target of $15.38, indicating a potential downside of 23.51%. Given CapStar Financial’s higher probable upside, analysts plainly believe CapStar Financial is more favorable than China Minsheng Banking.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
China Minsheng Banking	N/A	N/A	N/A
CapStar Financial	16.17%	8.46%	0.93%

Summary

CapStar Financial beats China Minsheng Banking on 10 of the 12 factors compared between the two stocks.

About China Minsheng Banking

China Minsheng Banking Corp., Ltd. provides various financial products and services to 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 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, home, medium and long term, and short-term working capital loans; micro-credit products for individuals; debit and credit cards; and safe deposit boxes. In addition, it provides payment and collection agent, and clearing services, as well as internet, mobile, and telephone 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, and trust financing services. Additionally, it provides convenient finance, investment banking, and asset management services, as well as non-financial services in the education, business travel, traveler, art, luxury life, health, club, and isports areas. The company has 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.

About CapStar Financial

CapStar Financial Holdings, Inc. operates as the bank holding company for CapStar Bank that provides banking and other financial services to individuals and corporate customers in Tennessee, the United States. It offers noninterest-bearing demand deposits, interest-bearing transaction accounts, money market accounts, savings accounts, and time deposits; mortgage banking products; and wealth management and treasury management services. The company also provides commercial and residential real estate, construction and land development, commercial and industrial, consumer, non-owner-occupied real estate, home equity, paycheck protection program (PPP), and other loans, as well as business term loans, equipment financing, and lines of credit to small and medium sized businesses. In addition, it offers mobile banking services; and debit and credit cards. CapStar Financial Holdings, Inc. was founded in 2007 and is headquartered in Nashville, Tennessee.