Critical Contrast: Bank of Communications (OTCMKTS:BCMXY) and Banco Latinoamericano de Comercio Exterior (NYSE:BLX)

Bank of Communications (OTCMKTS:BCMXY) and Banco Latinoamericano de Comercio Exterior (NYSE:BLX) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, risk, earnings, valuation, institutional ownership and dividends.

Earnings and Valuation

This table compares Bank of Communications and Banco Latinoamericano de Comercio Exterior”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bank of Communications	$71.22 billion	0.86	$13.30 billion	$3.66	5.63
Banco Latinoamericano de Comercio Exterior	$836.85 million	2.62	$226.88 million	$6.02	9.79

Bank of Communications has higher revenue and earnings than Banco Latinoamericano de Comercio Exterior. Bank of Communications is trading at a lower price-to-earnings ratio than Banco Latinoamericano de Comercio Exterior, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Bank of Communications has a beta of -0.06, indicating that its stock price is 106% less volatile than the S&P 500. Comparatively, Banco Latinoamericano de Comercio Exterior has a beta of 0.79, indicating that its stock price is 21% less volatile than the S&P 500.

Institutional & Insider Ownership

19.5% of Banco Latinoamericano de Comercio Exterior shares are held by institutional investors. 0.2% of Banco Latinoamericano de Comercio Exterior shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Bank of Communications and Banco Latinoamericano de Comercio Exterior’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bank of Communications	19.03%	7.66%	0.63%
Banco Latinoamericano de Comercio Exterior	27.77%	14.36%	1.79%

Analyst Recommendations

This is a summary of current recommendations and price targets for Bank of Communications and Banco Latinoamericano de Comercio Exterior, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bank of Communications	0	1	0	0	2.00
Banco Latinoamericano de Comercio Exterior	0	0	0	1	4.00

Dividends

Bank of Communications pays an annual dividend of $0.98 per share and has a dividend yield of 4.8%. Banco Latinoamericano de Comercio Exterior pays an annual dividend of $2.75 per share and has a dividend yield of 4.7%. Bank of Communications pays out 26.8% of its earnings in the form of a dividend. Banco Latinoamericano de Comercio Exterior pays out 45.7% 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. Banco Latinoamericano de Comercio Exterior has raised its dividend for 2 consecutive years. Bank of Communications is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Banco Latinoamericano de Comercio Exterior beats Bank of Communications on 12 of the 16 factors compared between the two stocks.

About Bank of Communications

Bank of Communications Co., Ltd. provides commercial banking products and services in China. The company offers savings deposit products, including demand deposits, lump-sum deposits and withdrawal, time deposit of small savings for lump-sum withdrawal, interest withdrawal on principal deposited, time-demand deposit, call deposit, swap management, and education deposit; personal certificate of deposit; salary financing A; and foreign currency deposit. It also provides credit, quasi-credit, and debit cards; new housing and second-hand mortgage loans and unsecured personal loans; personal wealth management advisor services; and precious metal and commodity trading services. In addition, the company offers corporate structured deposit and corporate certificate of deposit; corporate cash management; industrial chain finance program comprising prepayment financing, inventory financing, accounts receivable financing and accounts payable financing; syndicated loans; corporation overdraft; investment banking services; and offshore banking services, such as repayment financing, inventory financing, accounts receivable financing and accounts payable financing, and forex currencies. Further, it provides bond account activation, bond distribution, and transaction services; related bond escrow and settlement, pledge registration, and principal and interest payment services; training and consulting services for cooperative banks; cross-border inter-bank payments system services; consignment sales of precious metal products; bond underwriting distribution; third party bond depository services; bank derivatives transfer; b-share transfer; bankfutures transfer; standard warehouse warrant pledged financing; institutional investment consulting, wealth management, and insurance services; and clearing and settlement services for future markets. The company was founded in 1908 and is headquartered in Shanghai, the People’s Republic of China.

About Banco Latinoamericano de Comercio Exterior

Banco Latinoamericano de Comercio Exterior, S. A., a multinational bank, primarily engages in the financing of foreign trade in Latin America and the Caribbean. The company operates in two segments, Commercial and Treasury. It offers bilateral loans; structured loans including syndicated and clubbed, such as acquisition and pre-export financing, A/B loan financing, bridge loans, and liability management; and project financing. The company also provides letter of credit comprising import and export letters of credit, and credit discounting and financing, as well as usance payable at sight; stand-by services; bank guarantees, including first demand and local guarantees; import and export documentary collection; irrevocable reimbursement undertaking; and canal tolls. In addition, it offers liquidity and investment solutions, such as time deposits, DDA accounts, Yankee certificate of deposits, and EMTN private placement services, as well as supply chain finance services. The company primarily serves financial institutions, corporations, and sovereigns and state-owned entities. Banco Latinoamericano de Comercio Exterior, S. A.was formerly known as Banco Latinoamericano de Exportaciones, S.A. and changed its name to Banco Latinoamericano de Comercio Exterior, S. A. in June 2009. The company was founded in 1975 and is headquartered in Panama City, the Republic of Panama.