Bank of China (OTCMKTS:BACHY) versus Timberland Bancorp (NASDAQ:TSBK) Financial Contrast

Bank of China (OTCMKTS:BACHY) and Timberland Bancorp (NASDAQ:TSBK) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, valuation, institutional ownership, risk, profitability, dividends and earnings.

Valuation & Earnings

This table compares Bank of China and Timberland Bancorp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bank of China	$169.73 billion	1.47	$33.81 billion	$2.61	7.40
Timberland Bancorp	$114.63 million	3.06	$29.16 million	$3.99	11.28

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

Institutional and Insider Ownership

65.5% of Timberland Bancorp shares are held by institutional investors. 3.6% of Timberland Bancorp shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings and price targets for Bank of China and Timberland Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bank of China	0	1	0	0	2.00
Timberland Bancorp	0	0	0	1	4.00

Dividends

Bank of China pays an annual dividend of $0.63 per share and has a dividend yield of 3.3%. Timberland Bancorp pays an annual dividend of $1.20 per share and has a dividend yield of 2.7%. Bank of China pays out 24.1% of its earnings in the form of a dividend. Timberland Bancorp pays out 30.1% 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. Timberland Bancorp has raised its dividend for 13 consecutive years. Bank of China is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Bank of China and Timberland Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bank of China	20.44%	7.88%	0.68%
Timberland Bancorp	26.46%	11.72%	1.55%

Risk and Volatility

Bank of China has a beta of 0.08, suggesting that its stock price is 92% less volatile than the S&P 500. Comparatively, Timberland Bancorp has a beta of 0.31, suggesting that its stock price is 69% less volatile than the S&P 500.

Summary

Timberland Bancorp beats Bank of China on 12 of the 16 factors compared between the two stocks.

About Bank of China

Bank of China Limited, together with its subsidiaries, provides various banking and financial services in Chinese Mainland, Hong Kong, Macao, Taiwan, and internationally. It operates through six segments: Corporate Banking, Personal Banking, Treasury Operations, Investment Banking, Insurance, and Other. The Corporate Banking segment provides current accounts, deposits, overdrafts, loans, payments and settlements, trade-related products, and other credit facilities, as well as foreign currency, derivative, and wealth management products for corporate customers, government authorities, and financial institutions. The Personal Banking segment offers savings deposits, personal loans, credit cards and debit cards, payments and settlements, wealth management, and funds and insurance agency services to retail customers. The Treasury Operations segment offers foreign exchange transactions, customer-based interest rate, and foreign exchange derivative transactions, as well as money market transactions, proprietary trading, and asset and liability management. The Investment Banking segment provides debt and equity underwriting and financial advisory, sale and trading of securities, stock brokerage, investment research, asset management services, and private equity investment services. The Insurance segment provides underwriting services for general and life insurance business, and insurance agency services. In addition, the company operates debt-to-equity swaps and other supporting, and aircraft and financial leasing business. The company was founded in 1912 and is headquartered in Beijing, China.

About Timberland Bancorp

Timberland Bancorp, Inc. operates as the bank holding company for Timberland Bank that provides various community banking services in Washington. It offers various deposit products, including money market deposit, checking, and regular savings accounts, as well as certificates of deposit. The company also provides one-to four-family residential, multi-family, and commercial real estate loans; and construction lending products, such as custom and owner/builder, speculative one- to four-family, commercial, multi-family, land development, and land development. In addition, it offers consumer loans comprising home equity lines of credit and second mortgage loans, automobile loans, boat loans, motorcycle loans, recreational vehicle loans, savings account loans, and unsecured loans; and commercial business loans. Timberland Bancorp, Inc. was founded in 1915 and is headquartered in Hoquiam, Washington.