Financial Comparison: Royal Bank Of Canada (NYSE:RY) vs. Commonwealth Bank of Australia (OTCMKTS:CMWAY)

Royal Bank Of Canada (NYSE:RY) and Commonwealth Bank of Australia (OTCMKTS:CMWAY) are both large-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, risk, earnings, dividends and valuation.

Volatility & Risk

Royal Bank Of Canada has a beta of 0.89, meaning that its share price is 11% less volatile than the S&P 500. Comparatively, Commonwealth Bank of Australia has a beta of 1.3, meaning that its share price is 30% more volatile than the S&P 500.

Valuation and Earnings

This table compares Royal Bank Of Canada and Commonwealth Bank of Australia”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Royal Bank Of Canada	$98.71 billion	1.96	$11.92 billion	$9.00	15.28
Commonwealth Bank of Australia	$61.51 billion	3.02	$9.01 billion	N/A	N/A

Royal Bank Of Canada has higher revenue and earnings than Commonwealth Bank of Australia.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Royal Bank Of Canada	13.37%	15.75%	0.87%
Commonwealth Bank of Australia	N/A	N/A	N/A

Institutional & Insider Ownership

45.3% of Royal Bank Of Canada shares are owned by institutional investors. Comparatively, 0.0% of Commonwealth Bank of Australia shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

Royal Bank Of Canada pays an annual dividend of $4.53 per share and has a dividend yield of 3.3%. Commonwealth Bank of Australia pays an annual dividend of $3.36 per share and has a dividend yield of 3.0%. Royal Bank Of Canada pays out 50.3% of its earnings in the form of a dividend. Royal Bank Of Canada has raised its dividend for 15 consecutive years. Royal Bank Of Canada is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Royal Bank Of Canada and Commonwealth Bank of Australia, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Royal Bank Of Canada	0	3	4	1	2.75
Commonwealth Bank of Australia	0	1	0	0	2.00

Royal Bank Of Canada presently has a consensus target price of $193.00, indicating a potential upside of 40.33%. Given Royal Bank Of Canada’s stronger consensus rating and higher possible upside, equities analysts clearly believe Royal Bank Of Canada is more favorable than Commonwealth Bank of Australia.

Summary

Royal Bank Of Canada beats Commonwealth Bank of Australia on 12 of the 15 factors compared between the two stocks.

About Royal Bank Of Canada

Royal Bank of Canada operates as a diversified financial service company worldwide. The company's Personal & Commercial Banking segment offers checking and savings accounts, home equity financing, personal lending, private banking, indirect lending, including auto financing, mutual funds and self-directed brokerage accounts, guaranteed investment certificates, credit cards, and payment products and solutions; and lending, leasing, deposit, investment, foreign exchange, cash management, auto dealer financing, trade products, and services to small and medium-sized commercial businesses. This segment offers financial products and services through branches, automated teller machines, and mobile sales network. Its Wealth Management segment provides a suite of wealth, investment, trust, banking, credit, and other advice-based solutions and strategies to high net worth and ultra-high net worth individuals, and institutional clients; asset management products to institutional and individual clients; and asset and investor services to financial institutions, asset managers, and asset owners. The company's Insurance segment offers life, health, home, auto, travel, wealth, annuities, property and casualty, and reinsurance advice and solutions; and business insurance services to individual, business, and group clients through its advice centers, RBC insurance stores, and mobile advisors; digital platforms; and independent brokers and partners. The company's Capital Markets segment offers advisory and origination, sales and trading, lending and financing, and transaction banking services to corporations, institutional clients, asset managers, private equity firms, and governments. The company was founded in 1864 and is headquartered in Toronto, Canada.

About Commonwealth Bank of Australia

Commonwealth Bank of Australia provides 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 transaction, savings, and 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. It also provides institutional banking services; funds management, superannuation, and share broking products and services; home, car, health, life, income protection, and travel insurance products, as well as retail, premium, business, offshore services. In addition, the company offers 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. Commonwealth Bank of Australia was founded in 1911 and is based in Sydney, Australia.