China Construction Bank (OTCMKTS:CICHY) & Royal Bank Of Canada (NYSE:RY) Financial Comparison

China Construction Bank (OTCMKTS:CICHY) and Royal Bank Of Canada (NYSE:RY) are both large-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, earnings, profitability, analyst recommendations, risk, institutional ownership and valuation.

Dividends

China Construction Bank pays an annual dividend of $0.94 per share and has a dividend yield of 3.8%. Royal Bank Of Canada pays an annual dividend of $4.96 per share and has a dividend yield of 2.5%. China Construction Bank pays out 25.3% of its earnings in the form of a dividend. Royal Bank Of Canada pays out 43.4% 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. Royal Bank Of Canada has raised its dividend for 15 consecutive years. China Construction Bank is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares China Construction Bank and Royal Bank Of Canada”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
China Construction Bank	$181.98 billion	1.79	$47.15 billion	$3.72	6.71
Royal Bank Of Canada	$98.11 billion	2.84	$14.54 billion	$11.43	17.60

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

Volatility and Risk

China Construction Bank has a beta of 0.1, suggesting that its stock price is 90% less volatile than the S&P 500. Comparatively, Royal Bank Of Canada has a beta of 0.8, suggesting that its stock price is 20% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for China Construction Bank and Royal Bank Of Canada, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
China Construction Bank	0	1	0	0	2.00
Royal Bank Of Canada	0	5	7	1	2.69

Royal Bank Of Canada has a consensus target price of $225.00, suggesting a potential upside of 11.84%. Given Royal Bank Of Canada’s stronger consensus rating and higher possible upside, analysts clearly believe Royal Bank Of Canada is more favorable than China Construction Bank.

Profitability

This table compares China Construction Bank and Royal Bank Of Canada’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
China Construction Bank	27.65%	9.82%	0.78%
Royal Bank Of Canada	16.17%	17.79%	0.97%

Institutional & Insider Ownership

45.3% of Royal Bank Of Canada shares are held by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Royal Bank Of Canada beats China Construction Bank on 12 of the 17 factors compared between the two stocks.

About China Construction Bank

China Construction Bank Corporation provides various banking and related financial services to individuals and corporate customers in the People's Republic of China and internationally. It operates through Corporate Finance Business, Personal Finance Business, Treasury and Asset Management Business, and Others segments. The company accepts various deposits, such as foreign currency, all in one accounts, RMB, corporate term and notification, and corporate demand deposits, as well corporate deposits by agreement. Its loan products include personal business, car, and housing loans; and SME, traditional credit, commercial draft, buyer credit, and RMB credit line loans. The company also offers credit cards; physical gold for personal investment and personal gold accounts; foreign exchange services; certificate treasury and savings bonds, securities deposit accounts, and securities services, as well as bank-securities transfer and book-entry treasury bond over the counter transaction services; and wealth management products. In addition, it provides collection, salaries payment, third-party collection and payment, insurance agency, and remittance services; international settlement and financing, and FI services; securities and fund settlement services; guarantee-based, consulting and advising, and factoring services; fund custody services; and e-banking services. Further, the company offers institutional services comprising services for government agencies, social security, banks cooperation, bank-securities cooperation, bank-insurance cooperation, and services for non-banking financial institutions. China Construction Bank Corporation was founded in 1954 and is headquartered in Beijing, the People's Republic of China.

About Royal Bank Of Canada

Royal Bank of Canada operates as a diversified financial service company worldwide. The company's Personal & Commercial Banking segment offers checking and savings accounts, home equity financing, personal lending, private banking, indirect lending, including auto financing, mutual funds and self-directed brokerage accounts, guaranteed investment certificates, credit cards, and payment products and solutions; and lending, leasing, deposit, investment, foreign exchange, cash management, auto dealer financing, trade products, and services to small and medium-sized commercial businesses. This segment offers financial products and services through branches, automated teller machines, and mobile sales network. Its Wealth Management segment provides a suite of wealth, investment, trust, banking, credit, and other advice-based solutions and strategies to high net worth and ultra-high net worth individuals, and institutional clients; asset management products to institutional and individual clients; and asset and investor services to financial institutions, asset managers, and asset owners. The company's Insurance segment offers life, health, home, auto, travel, wealth, annuities, property and casualty, and reinsurance advice and solutions; and business insurance services to individual, business, and group clients through its advice centers, RBC insurance stores, and mobile advisors; digital platforms; and independent brokers and partners. The company's Capital Markets segment offers advisory and origination, sales and trading, lending and financing, and transaction banking services to corporations, institutional clients, asset managers, private equity firms, and governments. The company was founded in 1864 and is headquartered in Toronto, Canada.