Contrasting Bank Of Montreal (NYSE:BMO) & Chiba Bank (OTCMKTS:CHBAY)

Chiba Bank (OTCMKTS:CHBAY) and Bank Of Montreal (NYSE:BMO) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, valuation, risk, earnings, dividends, profitability and analyst recommendations.

Institutional and Insider Ownership

45.8% of Bank Of Montreal shares are owned by institutional investors. 1.0% of Bank Of Montreal 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.

Dividends

Chiba Bank pays an annual dividend of $1.08 per share and has a dividend yield of 2.0%. Bank Of Montreal pays an annual dividend of $4.87 per share and has a dividend yield of 3.4%. Chiba Bank pays out 25.7% of its earnings in the form of a dividend. Bank Of Montreal pays out 56.6% 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. Bank Of Montreal has increased its dividend for 4 consecutive years. Bank Of Montreal is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

Chiba Bank has a beta of 0.14, indicating that its stock price is 86% less volatile than the S&P 500. Comparatively, Bank Of Montreal has a beta of 0.92, indicating that its stock price is 8% less volatile than the S&P 500.

Earnings & Valuation

This table compares Chiba Bank and Bank Of Montreal”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chiba Bank	$2.38 billion	3.73	$490.11 million	$4.20	13.10
Bank Of Montreal	$55.92 billion	1.80	$6.22 billion	$8.61	16.51

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

Profitability

This table compares Chiba Bank and Bank Of Montreal’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Chiba Bank	20.92%	7.53%	0.42%
Bank Of Montreal	11.76%	12.16%	0.66%

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Chiba Bank and Bank Of Montreal, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chiba Bank	0	0	0	0	0.00
Bank Of Montreal	0	7	3	2	2.58

Bank Of Montreal has a consensus price target of $163.00, indicating a potential upside of 14.65%. Given Bank Of Montreal’s stronger consensus rating and higher possible upside, analysts plainly believe Bank Of Montreal is more favorable than Chiba Bank.

Summary

Bank Of Montreal beats Chiba Bank on 15 of the 18 factors compared between the two stocks.

About Chiba Bank

The Chiba Bank, Ltd., together with its subsidiaries, provides banking products and services in Japan and internationally. The company offers various deposit products, including savings, time deposits, currency deposits, investment trusts, bonds, and pensions; loans, which include mortgages, renovation loans, photovoltaic, vehicle, education, and other loan products; and insurance products, such as annuity, life, medical, student, death, and travel insurance. It also offers debit and credit cards, as well as internet banking services. In addition, the company engages in securities, investment management and advisory, software development, commissioned computation tasks, research and investigation of IT and financial technologies, leasing, operation, and management of investment funds, mergers and acquisition advisory, credit guarantee businesses, management and collection of claims businesses. Further, it provides loan guarantees and fee collection services; accounting, general administration entrustment, and temporary staff services; and is involved in outsourcing of operational business. Additionally, it rents and maintains office buildings and welfare facilities; provides research, survey, and consulting services; purchases and sells supplies and consumer goods; and engages in renewable energy generation. The company serves individuals and corporations. The Chiba Bank, Ltd. was incorporated in 1943 and is headquartered in Chiba City, Japan.

About Bank Of Montreal

Bank of Montreal provides diversified financial services primarily in North America. It operates through Canadian P&C, U.S P&C, BMO Wealth Management, and BMO Capital Markets segments. The company’s personal banking products and services include deposits, mortgages, home lending, consumer credit, small business lending, credit cards, cash management, financial and investment advice, and other banking services; and commercial banking products and services comprise various of financing options and treasury and payment solutions, as well as risk management products. It also offers investing, banking, and wealth management advisory; digital investing services; financial solutions for individuals, families, and businesses; provides investment management services to institutional, retail, and high net worth investors; and diversified insurance, and wealth and pension de-risking solutions. In addition, the company provides individual life, critical illness and annuity products, as well as segregated funds, and group creditor and travel insurance to customers; debt and equity capital-raising, loan origination and syndication, balance sheet management, treasury management, mergers and acquisitions advice, restructurings and recapitalizations, trade finance, and risk mitigation services, as well as a range of banking and other operating services. Further, the company offers research and access to financial markets for institutional, corporate and retail clients through an integrated suite of sales and trading solutions related to debt, foreign exchange, interest rates, credit, equities, securitization, and commodities; provides new product development and origination services, as well as risk management and advisory services for hedging strategies, including in interest rates, foreign exchange rates and commodities prices; and funding and liquidity management services. The company was founded in 1817 and is headquartered in Montreal, Canada.