Banco De Chile (NYSE:BCH) versus Commerzbank (OTCMKTS:CRZBY) Critical Comparison

Commerzbank (OTCMKTS:CRZBY) and Banco De Chile (NYSE:BCH) are both large-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, valuation, earnings, institutional ownership, analyst recommendations, risk and dividends.

Dividends

Commerzbank pays an annual dividend of $0.90 per share and has a dividend yield of 2.1%. Banco De Chile pays an annual dividend of $1.65 per share and has a dividend yield of 4.1%. Commerzbank pays out 35.6% of its earnings in the form of a dividend. Banco De Chile pays out 68.2% 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Commerzbank	11.55%	7.69%	0.46%
Banco De Chile	29.95%	19.47%	2.09%

Risk & Volatility

Commerzbank has a beta of 0.53, meaning that its stock price is 47% less volatile than the S&P 500. Comparatively, Banco De Chile has a beta of 0.23, meaning that its stock price is 77% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Commerzbank and Banco De Chile, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Commerzbank	0	4	5	1	2.70
Banco De Chile	1	4	0	0	1.80

Banco De Chile has a consensus target price of $37.00, indicating a potential downside of 7.97%. Given Banco De Chile’s higher probable upside, analysts plainly believe Banco De Chile is more favorable than Commerzbank.

Insider & Institutional Ownership

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

Valuation & Earnings

This table compares Commerzbank and Banco De Chile”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Commerzbank	$26.54 billion	1.74	$2.97 billion	$2.53	16.69
Banco De Chile	$3.89 billion	5.21	$1.30 billion	$2.42	16.61

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

Summary

Commerzbank beats Banco De Chile on 9 of the 17 factors compared between the two stocks.

About Commerzbank

Commerzbank AG provides banking and capital market products and services to private and small business customers, corporate, financial service providers, and institutional clients in Germany, rest of Europe, the Americas, Asia, and internationally. It operates through two segments, Private and Small-Business Customers, and Corporate Clients. The company offers saving, checking, business, and current accounts; term deposits; pension; credit and debit cards; payment solutions; overdraft services; various loans; and insurance products. It also provides trade securities; treasury management; corporate financing; real estate financing; financing advisory; merger and acquisition; foreign trade; trade financing; asset and risk management; and online banking, as well as wealth management services. Commerzbank AG was founded in 1870 and is headquartered in Frankfurt am Main, Germany.

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.