Banco de Chile (NYSE:BCH) and Westpac Banking (NYSE:WBK) are both large-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, risk, valuation, dividends, profitability, analyst recommendations and institutional ownership.

Institutional and Insider Ownership

1.3% of Banco de Chile shares are held by institutional investors. Comparatively, 0.6% of Westpac Banking shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

Banco de Chile pays an annual dividend of $2.32 per share and has a dividend yield of 2.7%. Westpac Banking pays an annual dividend of $1.38 per share and has a dividend yield of 7.4%. Banco de Chile pays out 42.0% of its earnings in the form of a dividend. Westpac Banking pays out 78.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Banco de Chile has increased its dividend for 6 consecutive years.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Banco de Chile and Westpac Banking, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Banco de Chile 3 2 0 0 1.40
Westpac Banking 2 3 1 0 1.83

Banco de Chile presently has a consensus price target of $91.00, indicating a potential upside of 4.57%. Given Banco de Chile’s higher possible upside, research analysts plainly believe Banco de Chile is more favorable than Westpac Banking.

Risk & Volatility

Banco de Chile has a beta of 0.35, suggesting that its share price is 65% less volatile than the S&P 500. Comparatively, Westpac Banking has a beta of 1.3, suggesting that its share price is 30% more volatile than the S&P 500.

Earnings and Valuation

This table compares Banco de Chile and Westpac Banking’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Banco de Chile $3.84 billion 3.84 $929.56 million $5.53 15.74
Westpac Banking $28.58 billion 2.22 $6.09 billion $1.75 10.69

Westpac Banking has higher revenue and earnings than Banco de Chile. Westpac Banking 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.

Profitability

This table compares Banco de Chile and Westpac Banking’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Banco de Chile 25.37% 17.90% 1.74%
Westpac Banking N/A N/A N/A

Summary

Banco de Chile beats Westpac Banking on 10 of the 16 factors compared between the two stocks.

About Banco de Chile

Banco de Chile provides various banking products and services to individuals, corporate clients, large companies, and small and medium-sized companies in Chile and internationally. The company operates through four segments: Retail, Wholesale, Treasury, and Subsidiaries. It offers checking accounts; personal, car, and mortgage loans; credit cards; credit lines; and investment products, such as fixed-term, automatic renewal, and tax benefit deposits, as well as stocks, portfolio management, voluntary retirement savings/mutual funds, foreign currency, and fixed income investment products. The company also provides insurance products and trust commissions, as well as financial consultancy services related to mergers and acquisitions, liabilities financing and restructuring, capital contribution, bonds and stocks emissions, and international business. In addition, it offers debt instruments; derivative contracts; and liquidity management, currency trading, foreign exchange transaction, international and treasury banking, securities brokerage, mutual fund and investment management, and securitization services, as well as payment management and collection services. Further, the company provides financing for importers and exporters; and factoring, leasing, express payment, electronic banking, and online payment services. It operates a network of approximately 423 branches and 1,453 ATMs. Banco de Chile was founded in 1855 and is headquartered in Santiago, Chile.

About Westpac Banking

Westpac Banking Corporation provides various banking and financial services in Australia, New Zealand, Asia, the Pacific region, and internationally. It operates through five divisions: Consumer Bank, Business Bank, BT Financial Group, Westpac Institutional Bank, and Westpac New Zealand. It offers everyday banking, savings, term deposit, moving to Australia, under 21 and student, business, community solutions one, not-for-profit savings, and foreign currency accounts; term, tailor-made, and farm management deposits; debit, credit, and travel money cards; home, personal, investment, small business, and commercial loans; and equipment, automotive, cash flow, property, and insurance premium financing services. It also provides home and content, landlord, car, travel, boat, caravan and trailer, life, credit card and loan repayment, income protection, business, farm pack, person income, and business overheads insurance products; superannuation and retirement products; investment portfolios; installment warrants; and trading, financial advisory, wealth, foreign currency exchange, international payment, cash flow management, international trade, and import and export services. In addition, it offers industry specific banking and treasury services; other services, such as emergency cash, online and telephone banking, ATMs, unclaimed money, travel center, margin lending, and banking services to migrants moving to Australia; and mobile wallets. Further, it provides capital advisory and fund management, transactional and private banking, and financial market services; and corporate and structured finance, as well as trade and supply chain finance. It serves individuals; micro, small, and medium enterprises; and commercial, corporate, institutional, and government customers. The company was formerly known as Bank of New South Wales and changed its name to Westpac Banking Corporation in October 1982. The company was founded in 1817 and is headquartered in Sydney, Australia.

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