Credicorp (NYSE:BAP) versus Industrial & Commercial Bank of China Ltd. (OTCMKTS:IDCBY) Critical Contrast

Credicorp (NYSE:BAP) and Industrial & Commercial Bank of China Ltd. (OTCMKTS:IDCBY) are both large-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, risk, earnings, dividends, valuation and profitability.

Analyst Recommendations

This is a breakdown of current ratings for Credicorp and Industrial & Commercial Bank of China Ltd., as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Credicorp	0	3	4	0	2.57
Industrial & Commercial Bank of China Ltd.	0	0	0	0	0.00

Credicorp presently has a consensus target price of $315.60, suggesting a potential downside of 6.52%. Given Credicorp’s stronger consensus rating and higher probable upside, analysts clearly believe Credicorp is more favorable than Industrial & Commercial Bank of China Ltd..

Institutional and Insider Ownership

89.8% of Credicorp shares are owned by institutional investors. 15.9% of Credicorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Volatility and Risk

Credicorp has a beta of 0.93, suggesting that its stock price is 7% less volatile than the S&P 500. Comparatively, Industrial & Commercial Bank of China Ltd. has a beta of 0.07, suggesting that its stock price is 93% less volatile than the S&P 500.

Earnings & Valuation

This table compares Credicorp and Industrial & Commercial Bank of China Ltd.”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Credicorp	$8.01 billion	3.98	$1.94 billion	$24.31	13.89
Industrial & Commercial Bank of China Ltd.	$208.16 billion	1.56	$51.27 billion	$2.78	6.54

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

Profitability

This table compares Credicorp and Industrial & Commercial Bank of China Ltd.’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Credicorp	24.53%	20.43%	2.86%
Industrial & Commercial Bank of China Ltd.	24.61%	8.89%	0.70%

Dividends

Credicorp pays an annual dividend of $11.01 per share and has a dividend yield of 3.3%. Industrial & Commercial Bank of China Ltd. pays an annual dividend of $0.61 per share and has a dividend yield of 3.4%. Credicorp pays out 45.3% of its earnings in the form of a dividend. Industrial & Commercial Bank of China Ltd. pays out 21.9% 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. Credicorp has increased its dividend for 3 consecutive years. Industrial & Commercial Bank of China Ltd. is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Credicorp beats Industrial & Commercial Bank of China Ltd. on 12 of the 17 factors compared between the two stocks.

About Credicorp

Credicorp Ltd. provides various financial, insurance, and health services and products primarily in Peru and internationally. It operates through Universal Banking, Insurance and Pensions, Microfinance, and Investment Banking and Equity Management segments. The Universal Banking segment grants various credits and financial instruments to individuals and legal entities; and various deposits and current accounts. The Insurance and Pensions segment issues insurance policies to cover losses in commercial property, transport, marine vessels, automobiles, life, health, and pensions; and management services for private pension funds. The Microfinance segment provides management of loans, deposits, and current accounts for small and microenterprises. The Investment Banking and Equity Management segment is involved in provision of brokerage and investment management services for corporations, institutional investors, governments, and foundations; structuring and placement of issues in the primary market; execution and negotiation of transactions in the secondary market; and structuring of securitization processes for corporate customers and manages mutual funds. The company was founded in 1889 and is headquartered in Lima, Peru.

About Industrial & Commercial Bank of China Ltd.

Industrial and Commercial Bank of China Limited, together with its subsidiaries, provides banking products and services in the People's Republic of China and internationally. The company operates through Corporate Banking, Personal Banking, and Treasury Operations segments. The Corporate Banking segment offers financial products and services to corporations, government agencies, and financial institutions. Its products and services include trade financing, deposit, corporate wealth management, custody, and various corporate intermediary services, as well as corporate loans. Its Personal Banking segment provides financial products and services to individual customers. This segment's products and services comprise personal loans and cards, deposits, and personal wealth management and intermediary services. The Treasury Business segment is involved in the money market transactions, investment securities, and proprietary and foreign exchange transactions businesses. It also offers e-banking services, investment banking, financial leasing, and insurance services. Industrial and Commercial Bank of China Limited was incorporated in 1984 and is based in Beijing, the People's Republic of China.