Comparing HDFC Bank (NYSE:HDB) and Community Bancorp (NASDAQ:CMTV)

HDFC Bank (NYSE:HDB) and Community Bancorp (NASDAQ:CMTV) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their risk, dividends, institutional ownership, earnings, analyst recommendations, profitability and valuation.

Institutional and Insider Ownership

17.6% of HDFC Bank shares are owned by institutional investors. 1.0% of HDFC Bank shares are owned by insiders. Comparatively, 6.6% of Community Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Risk and Volatility

HDFC Bank has a beta of 0.61, suggesting that its share price is 39% less volatile than the S&P 500. Comparatively, Community Bancorp has a beta of 0.38, suggesting that its share price is 62% less volatile than the S&P 500.

Valuation & Earnings

This table compares HDFC Bank and Community Bancorp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HDFC Bank	$2,495.62 billion	0.05	$7.51 billion	$1.70	13.10
Community Bancorp	$68.79 million	3.52	$16.97 million	$3.29	13.13

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

Dividends

HDFC Bank pays an annual dividend of $0.34 per share and has a dividend yield of 1.5%. Community Bancorp pays an annual dividend of $1.00 per share and has a dividend yield of 2.3%. HDFC Bank pays out 20.0% of its earnings in the form of a dividend. Community Bancorp pays out 30.4% 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 HDFC Bank and Community Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
HDFC Bank	15.96%	11.84%	1.64%
Community Bancorp	25.65%	15.97%	1.50%

Analyst Ratings

This is a summary of current ratings for HDFC Bank and Community Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HDFC Bank	1	2	1	0	2.00
Community Bancorp	0	0	0	1	4.00

HDFC Bank currently has a consensus price target of $26.10, indicating a potential upside of 17.21%. Given HDFC Bank’s higher probable upside, research analysts plainly believe HDFC Bank is more favorable than Community Bancorp.

Summary

Community Bancorp beats HDFC Bank on 9 of the 17 factors compared between the two stocks.

About HDFC Bank

HDFC Bank Limited provides banking and financial services to individuals and businesses in India, Bahrain, Hong Kong, and Dubai. The company operates in three segments: Wholesale Banking, Retail Banking, and Treasury Services. It accepts savings, salary, current, rural, public provident fund, pension, and demat accounts; fixed and recurring deposits; and safe deposit lockers, as well as offshore accounts and deposits, and overdrafts against fixed deposits. The company also provides personal, home, car, two-wheeler, business, doctor, educational, gold, consumer, and rural loans; loans against properties, securities, fixed deposits, rental receivables, and assets; loans for professionals; government sponsored programs; and loans on credit card, as well as working capital and commercial/construction equipment finance, healthcare/medical equipment and commercial vehicle finance, dealer finance, and term loans. In addition, it offers credit, debit, prepaid, and forex cards; payment and collection, export, import, remittance, bank guarantee, letter of credit, trade, hedging, and merchant and cash management services; insurance and investment products. Further, the company provides short term finance, bill discounting, structured finance, export credit, loan repayment, and documents collection services; online and wholesale, mobile, and phone banking services; unified payment interface, immediate payment, national electronic funds transfer, and real time gross settlement services; and channel financing, vendor financing, reimbursement account, money market, derivatives, employee trusts, cash surplus corporates, tax payment, and bankers to rights/public issue services, as well as financial solutions for supply chain partners and agricultural customers. It operates branches and automated teller machines in various cities/towns. The company was incorporated in 1994 and is headquartered in Mumbai, India.

About Community Bancorp

Community Bancorp. operates as the bank holding company for Community National Bank that provides a range of retail banking services to residents, businesses, nonprofit organizations, and municipalities. It provides various consumer banking products and services, including checking accounts, savings programs, ATMs, debit/credit cards, and night deposit facilities, as well as online, mobile, and telephone banking. The company’s business banking products and services comprise credit products for various business purposes, including financing for commercial business properties, equipment, inventories, and accounts receivable, as well as letters of credit; and business checking and other deposit accounts, cash management services, repurchase agreements, ACH and wire transfer services, and remote deposit capture. It offers commercial real estate lending products for commercial developers and investors, residential builders and developers, and community development entities, which include credit products to facilitate the purchase of land and/or build structures for business, for investors to develop residential or commercial properties, and for real estate secured financing of existing businesses, as well as financing to startups and other small businesses. The company’s residential real estate lending products include fixed-rate and adjustable rate residential mortgage and home equity loans; retail credit products include personal, automobile, and boat/recreational vehicle loans; and municipal and institutional banking products and services for state and local governments, schools, charities, membership, and not-for-profit associations comprise deposit accounts, tax-exempt loans, lines of credit, and term loans, as well as a collateralized secured deposit products. It operates through a main office in Derby; and eleven branch offices in northeastern and central Vermont. Community Bancorp. was founded in 1851 and is headquartered in Derby, Vermont.