Analyzing Banco Santander Brasil (NYSE:BSBR) and Bank of China (OTCMKTS:BACHY)

Bank of China (OTCMKTS:BACHY) and Banco Santander Brasil (NYSE:BSBR) are both large-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, valuation, risk, earnings and dividends.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Bank of China and Banco Santander Brasil, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bank of China	0	1	0	0	2.00
Banco Santander Brasil	2	1	1	0	1.75

Banco Santander Brasil has a consensus target price of $6.50, indicating a potential upside of 20.48%. Given Banco Santander Brasil’s higher possible upside, analysts clearly believe Banco Santander Brasil is more favorable than Bank of China.

Valuation & Earnings

This table compares Bank of China and Banco Santander Brasil”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bank of China	$169.73 billion	1.23	$33.81 billion	$2.57	6.30
Banco Santander Brasil	$42.52 billion	0.47	$2.29 billion	N/A	N/A

Bank of China has higher revenue and earnings than Banco Santander Brasil.

Institutional and Insider Ownership

14.5% of Banco Santander Brasil shares are held by institutional investors. 0.1% of Banco Santander Brasil shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Dividends

Bank of China pays an annual dividend of $0.63 per share and has a dividend yield of 3.9%. Banco Santander Brasil pays an annual dividend of $0.29 per share and has a dividend yield of 5.4%. Bank of China pays out 24.5% of its earnings in the form of a dividend.

Volatility & Risk

Bank of China has a beta of 0.07, suggesting that its share price is 93% less volatile than the S&P 500. Comparatively, Banco Santander Brasil has a beta of 0.56, suggesting that its share price is 44% less volatile than the S&P 500.

Profitability

This table compares Bank of China and Banco Santander Brasil’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bank of China	20.09%	7.81%	0.67%
Banco Santander Brasil	7.06%	10.49%	1.04%

Summary

Banco Santander Brasil beats Bank of China on 9 of the 14 factors compared between the two stocks.

About Bank of China

Bank of China Limited, together with its subsidiaries, provides various banking and financial services in Chinese Mainland, Hong Kong, Macao, Taiwan, and internationally. It operates through six segments: Corporate Banking, Personal Banking, Treasury Operations, Investment Banking, Insurance, and Other. The Corporate Banking segment provides current accounts, deposits, overdrafts, loans, payments and settlements, trade-related products, and other credit facilities, as well as foreign currency, derivative, and wealth management products for corporate customers, government authorities, and financial institutions. The Personal Banking segment offers savings deposits, personal loans, credit cards and debit cards, payments and settlements, wealth management, and funds and insurance agency services to retail customers. The Treasury Operations segment offers foreign exchange transactions, customer-based interest rate, and foreign exchange derivative transactions, as well as money market transactions, proprietary trading, and asset and liability management. The Investment Banking segment provides debt and equity underwriting and financial advisory, sale and trading of securities, stock brokerage, investment research, asset management services, and private equity investment services. The Insurance segment provides underwriting services for general and life insurance business, and insurance agency services. In addition, the company operates debt-to-equity swaps and other supporting, and aircraft and financial leasing business. The company was founded in 1912 and is headquartered in Beijing, China.

About Banco Santander Brasil

Banco Santander (Brasil) S.A., together with its subsidiaries, provides various banking products and services to individuals, small and medium enterprises, and corporate customers in Brazil and internationally. The company operates through Commercial Banking and Global Wholesale Banking segments. It offers local loans, commercial financing options, development bank funds, and cash management services; export and import financing, guarantees, structuring of asset services. In addition, the company provides financing and advisory services for infrastructure projects and capital markets instruments, as well as offers equity transactions and mergers and acquisitions services. Further, it offers foreign exchange products, derivatives, and investments to institutional investors, corporate clients, and individuals. Additionally, the company provides research services, as well as offers brokerage services for corporate, institutional, and individual investors. Furthermore, it provides deposits and other bank funding instruments, and debit and credit cards. The company provides financial services and products to its customers through multichannel distribution network comprising branches, mini-branches, ATMs, call centers, Internet banking, and mobile banking. Banco Santander (Brasil) S.A. was incorporated in 1985 and is headquartered in São Paulo, Brazil. The company operates as a subsidiary of Banco Santander, S.A.