Banco de Chile (NYSE:BCH) and KB Financial Group (NYSE:KB) are both large-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, dividends, earnings, risk, valuation, institutional ownership and profitability.
Volatility and Risk
Banco de Chile has a beta of 0.42, suggesting that its stock price is 58% less volatile than the S&P 500. Comparatively, KB Financial Group has a beta of 0.8, suggesting that its stock price is 20% less volatile than the S&P 500.
2.1% of Banco de Chile shares are owned by institutional investors. Comparatively, 6.6% of KB Financial Group shares are owned by institutional investors. 69.0% of KB Financial Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Banco de Chile pays an annual dividend of $0.79 per share and has a dividend yield of 2.7%. KB Financial Group pays an annual dividend of $1.37 per share and has a dividend yield of 3.7%. Banco de Chile pays out 46.5% of its earnings in the form of a dividend. KB Financial Group pays out 19.6% 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. Banco de Chile has raised its dividend for 7 consecutive years and KB Financial Group has raised its dividend for 3 consecutive years. KB Financial Group is clearly the better dividend stock, given its higher yield and lower payout ratio.
This table compares Banco de Chile and KB Financial Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Banco de Chile||23.39%||16.66%||1.58%|
|KB Financial Group||17.98%||8.36%||0.62%|
This is a breakdown of current ratings and recommmendations for Banco de Chile and KB Financial Group, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Banco de Chile||1||1||0||0||1.50|
|KB Financial Group||0||1||3||0||2.75|
Banco de Chile currently has a consensus price target of $76.00, indicating a potential upside of 159.21%. KB Financial Group has a consensus price target of $61.00, indicating a potential upside of 65.58%. Given Banco de Chile’s higher probable upside, research analysts clearly believe Banco de Chile is more favorable than KB Financial Group.
Valuation and Earnings
This table compares Banco de Chile and KB Financial Group’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Banco de Chile||$3.61 billion||4.10||$870.29 million||$1.70||17.25|
|KB Financial Group||$14.54 billion||1.00||$2.75 billion||$6.99||5.27|
KB Financial Group has higher revenue and earnings than Banco de Chile. KB Financial Group is trading at a lower price-to-earnings ratio than Banco de Chile, indicating that it is currently the more affordable of the two stocks.
KB Financial Group beats Banco de Chile on 10 of the 17 factors compared between the two stocks.
Banco de Chile Company Profile
Banco de Chile, together with its subsidiaries, provides banking and financial products and services to customers in Chile. The company operates through four segments: Retail, Wholesale, Treasury and Money Market Operations, and Subsidiaries. It offers deposit products, such as checking accounts, current accounts, demand deposits, demand accounts, saving accounts, and time deposits; credit cards; installment loans; credit lines; and residential mortgage loans, as well as short and long term financing. The company also provides commercial loans, such as factoring and leasing; trade finance services; liquidity management services, debt instruments, foreign trade, and derivative contracts; capital market services; cash management and non-lending services that include payroll, payment, and collection services, as well as treasury, financial advisory, and risk management products. In addition, it offers financial services, such as securities brokerage, mutual funds management, investment banking, insurance brokerage, and securitization services. The company serves customers in individuals; small and medium enterprises; and wholesale customers. As of December 31, 2017, it operated through 399 branches comprising 253 branches under the Banco de Chile brand name, 41 branches under the Banco Edwards Citi brand name, and 105 branches under the Banco CrediChile brand name, as well as 1,464 automatic teller machines. Banco de Chile was founded in 1855 and is headquartered in Santiago, Chile.
KB Financial Group Company Profile
KB Financial Group Inc., a financial holding company, provides a range of banking and related financial services to consumers and corporations in South Korea and internationally. It operates through Corporate Banking, Retail Banking, Other Banking Services, Securities Business, Non-life Insurance Business, Credit Card Business, and Life Insurance Business segments. The company offers deposit and credit products and services, and other related financial services to large, small, medium-sized enterprises and SOHOs, and individuals and households; and engages in trading in securities and derivatives, funding, and other supporting activities. It also provides investment banking, brokerage, and other supporting services; property and life insurance; and credit sale, cash service, and card loan services. In addition, the company offers foreign exchange transaction; financial investment; credit card and installment finance; security investment trust management and advisory; financial leasing; real estate trust management; capital investment; collection of receivables or credit investigation; software advisory, development, and supply; investment advisory and securities dealing; claim; management; asset-backed securitization; investment trust; trust asset management; and real estate services. KB Financial Group Inc. was founded in 2008 and is headquartered in Seoul, South Korea.
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