Analyzing China Merchants Bank (OTCMKTS:CIHKY) & ICICI Bank (NYSE:IBN)

ICICI Bank (NYSE:IBN) and China Merchants Bank (OTCMKTS:CIHKY) are both large-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, profitability, risk, institutional ownership, dividends, valuation and earnings.

Earnings and Valuation

This table compares ICICI Bank and China Merchants Bank”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ICICI Bank	$2,134.65 billion	0.05	$6.02 billion	$1.62	19.22
China Merchants Bank	$69.20 billion	2.43	$20.64 billion	$3.94	8.45

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

Institutional & Insider Ownership

18.2% of ICICI Bank shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

ICICI Bank pays an annual dividend of $0.21 per share and has a dividend yield of 0.7%. China Merchants Bank pays an annual dividend of $1.18 per share and has a dividend yield of 3.5%. ICICI Bank pays out 13.0% of its earnings in the form of a dividend. China Merchants Bank pays out 29.9% 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.

Analyst Recommendations

This is a breakdown of current ratings and price targets for ICICI Bank and China Merchants Bank, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ICICI Bank	0	1	0	0	2.00
China Merchants Bank	0	0	0	0	0.00

Profitability

This table compares ICICI Bank and China Merchants Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ICICI Bank	24.91%	14.91%	1.89%
China Merchants Bank	32.06%	12.28%	1.21%

Volatility & Risk

ICICI Bank has a beta of 0.55, indicating that its share price is 45% less volatile than the S&P 500. Comparatively, China Merchants Bank has a beta of 0.37, indicating that its share price is 63% less volatile than the S&P 500.

Summary

ICICI Bank beats China Merchants Bank on 8 of the 13 factors compared between the two stocks.

About ICICI Bank

ICICI Bank Limited provides various banking products and services in India and internationally. It operates through Retail Banking, Wholesale Banking, Treasury, Other Banking, Life Insurance, and Others segments. The company offers savings, salary, pension, current, and other accounts; and time, fixed, recurring, and security deposits services. It also provides home, car, two-wheeler, personal, gold, and commercial business loans, as well as loans against securities and other loans; business loans, including working capital finance, term loans, collateral free loans, loans without financials, finance for importers and exporters, and overdraft facilities, as well as loans for new entities and card swipes; and credit, debit, prepaid, travel, forex, and corporate cards. In addition, the company offers pockets wallet; fixed income products; investment products, such as mutual funds, gold monetization schemes, initial public offerings, and other online investment services; and agri and rural business, farmer finance, tractor loans, and micro banking services, as well as other services to agri corporates. Further, it provides portfolio management, trade, foreign exchange, locker, private and NRI banking, and cash management services; family wealth and demat accounts; commercial and investment banking, capital market, custodial, and institutional banking services; health, personal accident, fire, and motor insurance, as well as distributes general and life insurance products; and Internet, mobile, and phone banking services. Additionally, the company offers securities investment, broking, trading, and underwriting services; and merchant banking, trusteeship, housing finance, pension fund management, asset management, investment advisory, points of presence, and private equity/venture capital fund management services. ICICI Bank Limited was founded in 1955 and is headquartered in Mumbai, India.

About China Merchants Bank

China Merchants Bank Co., Ltd., together with its subsidiaries, provides various banking products and services. It operates through Wholesale Finance Business, Retail Finance Business, and Other Business segments. The company offers current, demand, time, call, savings, notice, and renminbi accounts. Its loan products include personal commercial real estate, consumption, housing, and car loans; loans to finance for studying abroad; micro-business loans; mortgage loans for equipment; joint guarantee, special guarantee, and housing mortgage loan; bank acceptance, discount, liquid capital, and fixed asset loans; and loans for vessels. The company also offers credit cards; insurance products; open-ended funds; discount and guarantees for commercial bills, redemption of commercial bills, and guaranteed discount for commercial acceptance bills; and financial consultation, debt financing underwriting, merger and acquisition financing, and equity financing and enterprise listing services. In addition, it provides forfeiting and risk participation, escrow, cross-border RMB clearing, and interbank services; and risk and financial management, cross-border RMB and oversea financing, international factoring and settlement, and trade finance services. Further, the company offers financial leasing and guarantee, investment and wealth management, forex option and gold trading, forex express trading, international, offshore and private banking, custody, pension, and electronic banking services. The company also operates in Hong Kong, New York, London, Singapore, Luxembourg, Sydney, and Taipei. China Merchants Bank Co., Ltd. was founded in 1987 and is headquartered in Shenzhen, China.