Critical Survey: Banco Bradesco (NYSE:BBD) and China Construction Bank (OTCMKTS:CICHY)

Banco Bradesco (NYSE:BBD) and China Construction Bank (OTCMKTS:CICHY) are both large-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, earnings, institutional ownership, analyst recommendations, risk, valuation and profitability.

Dividends

Banco Bradesco pays an annual dividend of $0.03 per share and has a dividend yield of 0.9%. China Construction Bank pays an annual dividend of $0.80 per share and has a dividend yield of 3.6%. Banco Bradesco pays out 7.7% of its earnings in the form of a dividend. China Construction Bank pays out 21.9% 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 Ratings

This is a summary of recent ratings and recommmendations for Banco Bradesco and China Construction Bank, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Banco Bradesco	0	0	2	0	3.00
China Construction Bank	0	1	0	0	2.00

Profitability

This table compares Banco Bradesco and China Construction Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Banco Bradesco	9.24%	14.15%	1.10%
China Construction Bank	26.72%	9.70%	0.77%

Valuation and Earnings

This table compares Banco Bradesco and China Construction Bank”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Banco Bradesco	$41.79 billion	0.85	$4.24 billion	$0.39	8.60
China Construction Bank	$181.98 billion	1.58	$47.15 billion	$3.66	6.01

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

Volatility and Risk

Banco Bradesco has a beta of 0.53, meaning that its stock price is 47% less volatile than the S&P 500. Comparatively, China Construction Bank has a beta of 0.1, meaning that its stock price is 90% less volatile than the S&P 500.

Summary

Banco Bradesco beats China Construction Bank on 7 of the 13 factors compared between the two stocks.

About Banco Bradesco

Banco Bradesco S.A., together with its subsidiaries, provides various banking products and services to individuals, corporates, and businesses in Brazil and internationally. The company operates through two segments, Banking and Insurance. It provides current, savings, click, and salary accounts; real estate credit, vehicle financing, payroll loans, mortgage loans, microcredit, leasing, and personal and installment credit; overdraft and agribusiness loans; debit and business cards; financial and security services; consortium products; car, personal accident, dental, travel, and life insurance; investment products; pension products; foreign currency exchange services; capitalization bonds; and internet banking services. Banco Bradesco S.A. was founded in 1943 and is headquartered in Osasco, Brazil.

About China Construction Bank

China Construction Bank Corporation provides various banking and related financial services to individuals and corporate customers in the People's Republic of China and internationally. It operates through Corporate Finance Business, Personal Finance Business, Treasury and Asset Management Business, and Others segments. The company accepts various deposits, such as foreign currency, all in one accounts, RMB, corporate term and notification, and corporate demand deposits, as well corporate deposits by agreement. Its loan products include personal business, car, and housing loans; and SME, traditional credit, commercial draft, buyer credit, and RMB credit line loans. The company also offers credit cards; physical gold for personal investment and personal gold accounts; foreign exchange services; certificate treasury and savings bonds, securities deposit accounts, and securities services, as well as bank-securities transfer and book-entry treasury bond over the counter transaction services; and wealth management products. In addition, it provides collection, salaries payment, third-party collection and payment, insurance agency, and remittance services; international settlement and financing, and FI services; securities and fund settlement services; guarantee-based, consulting and advising, and factoring services; fund custody services; and e-banking services. Further, the company offers institutional services comprising services for government agencies, social security, banks cooperation, bank-securities cooperation, bank-insurance cooperation, and services for non-banking financial institutions. China Construction Bank Corporation was founded in 1954 and is headquartered in Beijing, the People's Republic of China.