Head to Head Analysis: Banco De Chile (NYSE:BCH) vs. VersaBank (NASDAQ:VBNK)

Banco De Chile (NYSE:BCH) and VersaBank (NASDAQ:VBNK) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, institutional ownership, valuation, profitability, analyst recommendations, earnings and dividends.

Insider & Institutional Ownership

1.2% of Banco De Chile shares are held by institutional investors. Comparatively, 56.9% of VersaBank shares are held by institutional investors. 5.9% of Banco De Chile shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

Banco De Chile has a beta of 0.23, suggesting that its stock price is 77% less volatile than the S&P 500. Comparatively, VersaBank has a beta of 1.04, suggesting that its stock price is 4% more volatile than the S&P 500.

Valuation and Earnings

This table compares Banco De Chile and VersaBank”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Banco De Chile	$3.89 billion	5.21	$1.30 billion	$2.42	16.59
VersaBank	$217.14 million	3.09	$20.32 million	$0.69	30.23

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

Profitability

This table compares Banco De Chile and VersaBank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Banco De Chile	29.95%	19.47%	2.09%
VersaBank	9.34%	8.32%	0.75%

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Banco De Chile and VersaBank, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Banco De Chile	1	4	0	0	1.80
VersaBank	0	2	1	0	2.33

Banco De Chile currently has a consensus target price of $37.00, indicating a potential downside of 7.86%. VersaBank has a consensus target price of $25.00, indicating a potential upside of 19.85%. Given VersaBank’s stronger consensus rating and higher probable upside, analysts plainly believe VersaBank is more favorable than Banco De Chile.

Dividends

Banco De Chile pays an annual dividend of $1.65 per share and has a dividend yield of 4.1%. VersaBank pays an annual dividend of $0.07 per share and has a dividend yield of 0.3%. Banco De Chile pays out 68.2% of its earnings in the form of a dividend. VersaBank pays out 10.1% 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.

Summary

Banco De Chile beats VersaBank on 9 of the 16 factors compared between the two stocks.

About Banco De Chile

Banco de Chile, together with its subsidiaries, provides various banking services to customers in Chile. The company offers checking and debit accounts, debit and credit cards, and lines of credit; mortgage, consume, commercial, general purpose mortgage loans, and finance leases; and factoring services, mutual fund management, stock brokerage, foreign trade, payments and collections, insurance brokerage, including life and general insurance, as well as time deposits, savings instruments, and foreign currency services through branches under the Banco de Chile and Banco Edwards brands. It also provides working capital loans, corporate credit cards, foreign currency brokerage, leasing and long-term syndicated loans, advisory services for mergers acquisitions and debt restructuring; cash management services, including payment and collection services; and international fund transfer networks, current account and deposit products, fund administration, and treasury management. In addition, the company offers insurance brokerage, derivative contracts, transactional banking, financial risks coverage, representation and asset custody, investment banking and management, capital markets products, foreign exchange transactions; and advisory services for initial public offerings, capital increases, sales and purchases of blocks of shares, private capital placements, public share tenders, company valuations, bond issuances, and syndicated loans services. Further, it provides foreign exchange brokerage, forward contracts, interest rate swaps, repurchase agreements, and other investment products based on bonds, mortgage bonds and deposits. The company serves individuals, small and medium-sized companies, corporate clients, and large companies, real estate and construction, and high net worth family office customers. Banco de Chile was founded in 1893 and is headquartered in Santiago, Chile.

About VersaBank

VersaBank provides various banking products and services in Canada and the United States. It offers deposit products, such as web-based chequing accounts, guaranteed investment certificates, registered retirement savings plans, and tax-free savings accounts, as well as deposit insurance products. The company also provides lending services, including point of sale financing that covers purchasing loan and lease receivables from finance companies operating in various industries; commercial banking services comprising commercial real estate, public sector/infrastructure financing, and condominium financing; and residential mortgages. In addition, it offers cybersecurity services. The company was formerly known as Pacific & Western Bank of Canada and changed its name to VersaBank in May 2016. VersaBank was incorporated in 1979 and is headquartered in London, Canada.