Critical Comparison: Agri Bank China (OTCMKTS:ACGBY) vs. Bank of Communications (OTCMKTS:BCMXY)

Volatility & Risk

Agri Bank China has a beta of 0.08, indicating that its share price is 92% less volatile than the S&P 500. Comparatively, Bank of Communications has a beta of -0.17, indicating that its share price is 117% less volatile than the S&P 500.

Valuation & Earnings

This table compares Agri Bank China and Bank of Communications”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Agri Bank China	$195.64 billion	1.22	$39.24 billion	$2.70	6.29
Bank of Communications	$75.42 billion	0.82	$13.02 billion	$3.87	5.35

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

Dividends

Agri Bank China pays an annual dividend of $0.61 per share and has a dividend yield of 3.6%. Bank of Communications pays an annual dividend of $0.86 per share and has a dividend yield of 4.2%. Agri Bank China pays out 22.6% of its earnings in the form of a dividend. Bank of Communications pays out 22.2% 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. Bank of Communications is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Agri Bank China and Bank of Communications’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Agri Bank China	21.14%	9.25%	0.63%
Bank of Communications	18.19%	7.70%	0.62%

Summary

Agri Bank China beats Bank of Communications on 8 of the 11 factors compared between the two stocks.

About Agri Bank China

Agricultural Bank of China Limited, together with its subsidiaries, provides banking products and services. The company operates through Corporate Banking, Personal Banking, and Treasury Operations segments. It offers demand, personal call, foreign currency call, time or demand optional, foreign exchange call, foreign exchange time, savings, agreed term, and negotiated deposit accounts, as well as certificates of deposit; and loans, including housing, consumer, business, fixed asset, working capital, real estate, and entrusted syndicated loans, as well as trade finances, guarantees and commitments, and loans with custody of export rebates accounts. The company provides credit card, debit card, payment and settlement, private banking, cash management, investment banking, custody, financial market, and financial institution services, as well as trading and wealth management services; and personal fund collection and automatic transfer services. In addition, it offers agro-related personal and corporate banking products and services; telephone, mobile, self-service, television, and SMS banking services; financial leasing services; fund management services; asset custodian services; and insurance and reinsurance related products and services. The company operates domestic branches, including specialized institutions, training institutes, tier-1 branches, tier-2 branches, tier-1 sub-branches, foundation-level branch outlets and other establishments; overseas branches in Hong Kong, Singapore, Seoul, New York, Dubai International Financial Centre, Tokyo, Frankfurt, Sydney, Luxemburg, Dubai, London, Macao, and Hanoi; and overseas representative offices in Vancouver, Taipei, Sao Paulo, and Dushanbe. The company was founded in 1951 and is based in Beijing, the People's Republic of China.

About Bank of Communications

Bank of Communications Co., Ltd. provides commercial banking products and services in China. The company offers savings deposit products, including demand deposits, lump-sum deposits and withdrawal, time deposit of small savings for lump-sum withdrawal, interest withdrawal on principal deposited, time-demand deposit, call deposit, swap management, and education deposit; personal certificate of deposit; salary financing A; and foreign currency deposit. It also provides credit, quasi-credit, and debit cards; new housing and second-hand mortgage loans and unsecured personal loans; personal wealth management advisor services; and precious metal and commodity trading services. In addition, the company offers corporate structured deposit and corporate certificate of deposit; corporate cash management; industrial chain finance program comprising prepayment financing, inventory financing, accounts receivable financing and accounts payable financing; syndicated loans; corporation overdraft; investment banking services; and offshore banking services, such as repayment financing, inventory financing, accounts receivable financing and accounts payable financing, and forex currencies. Further, it provides bond account activation, bond distribution, and transaction services; related bond escrow and settlement, pledge registration, and principal and interest payment services; training and consulting services for cooperative banks; cross-border inter-bank payments system services; consignment sales of precious metal products; bond underwriting distribution; third party bond depository services; bank derivatives transfer; b-share transfer; bankfutures transfer; standard warehouse warrant pledged financing; institutional investment consulting, wealth management, and insurance services; and clearing and settlement services for future markets. The company was founded in 1908 and is headquartered in Shanghai, the People’s Republic of China.