Oversea-Chinese Banking (OTCMKTS:OVCHY) and Commonwealth Bank of Australia (OTCMKTS:CMWAY) are both large-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, valuation, risk, earnings and profitability.
Volatility and Risk
Oversea-Chinese Banking has a beta of 0.74, meaning that its share price is 26% less volatile than the S&P 500. Comparatively, Commonwealth Bank of Australia has a beta of 0.98, meaning that its share price is 2% less volatile than the S&P 500.
This is a summary of current ratings and recommmendations for Oversea-Chinese Banking and Commonwealth Bank of Australia, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Commonwealth Bank of Australia||0||0||0||0||N/A|
Earnings & Valuation
This table compares Oversea-Chinese Banking 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|
|Oversea-Chinese Banking||$12.20 billion||2.77||$3.57 billion||$1.64||9.66|
|Commonwealth Bank of Australia||$23.09 billion||5.13||$6.47 billion||$2.68||24.96|
Commonwealth Bank of Australia has higher revenue and earnings than Oversea-Chinese Banking. Oversea-Chinese Banking is trading at a lower price-to-earnings ratio than Commonwealth Bank of Australia, indicating that it is currently the more affordable of the two stocks.
Oversea-Chinese Banking pays an annual dividend of $0.41 per share and has a dividend yield of 2.6%. Commonwealth Bank of Australia pays an annual dividend of $1.35 per share and has a dividend yield of 2.0%. Oversea-Chinese Banking pays out 25.0% of its earnings in the form of a dividend. Commonwealth Bank of Australia pays out 50.4% 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. Oversea-Chinese Banking is clearly the better dividend stock, given its higher yield and lower payout ratio.
Institutional and Insider Ownership
0.0% of Oversea-Chinese Banking shares are owned by institutional investors. Comparatively, 0.1% of Commonwealth Bank of Australia shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
This table compares Oversea-Chinese Banking and Commonwealth Bank of Australia’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Commonwealth Bank of Australia||N/A||N/A||N/A|
Commonwealth Bank of Australia beats Oversea-Chinese Banking on 7 of the 10 factors compared between the two stocks.
About Oversea-Chinese Banking
Oversea-Chinese Banking Corporation Limited provides financial services in Singapore, Malaysia, Indonesia, Greater China, other parts of the Asia Pacific, and internationally. The company's Global Consumer/Private Banking segment provides products and services to individual customers, including checking accounts, and savings and fixed deposits; housing and other personal loans; credit cards; wealth management products consisting of unit trusts, banc assurance products, and structured deposits; and brokerage services. This segment also offers investment advice and portfolio management, estate and trust planning, and wealth structuring services for high net worth individuals. Its Global Corporate/Investment Banking segment provides project financing, overdrafts, trade financing, and deposit accounts; fee-based services, such as cash management and custodian services; investment banking services, including financing solutions, syndicated loans and advisory services, corporate finance services for initial public offerings, secondary fund-raising, and takeovers and mergers; and customized and structured equity-linked financing services. This segment serves corporates, public sector, and small and medium enterprises. The company's Global Treasury and Markets segment is involved in the foreign exchange activities, money market operations, and fixed income and derivatives trading, as well as provision of structured treasury products and financial solutions. Its OCBC Wing Hang segment offers commercial banking, consumer financing, share brokerage, and insurance services. The company's Insurance segment provides fund management services, and life and general insurance products. Its Others segment is involved in property and investment holding activities. The company has approximately 540 branches and representative offices in 19 countries and regions. Oversea-Chinese Banking Corporation Limited was founded in 1912 and is headquartered in Singapore.
About Commonwealth Bank of Australia
Commonwealth Bank of Australia provides integrated financial services in Australia, New Zealand, and internationally. It offers retail, premium, business, and institutional banking; and funds management, insurance, and share-broking products and services. The company operates through five segments: Retail Banking Services, Business and Private Banking, Institutional Banking and Markets, New Zealand, and International Financial Services and Corporate Centre. It offers transaction and savings accounts, term deposits, personal and business loans, credit cards, insurance products, international payment, and private banking services, as well as home, car, and personal loans. 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 merchant, international and foreign exchange, and risk management services. It operates through 1,118 branches and 3,542 ATMs. The company was founded in 1911 and is based in Sydney, Australia.
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