Analyzing China Merchants Bank (OTCMKTS:CIHKY) and Private Bancorp of America (OTCMKTS:PBAM)

Private Bancorp of America (OTCMKTS:PBAM) and China Merchants Bank (OTCMKTS:CIHKY) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, analyst recommendations, earnings, risk, institutional ownership, profitability and dividends.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Private Bancorp of America	25.45%	16.85%	1.72%
China Merchants Bank	32.69%	12.45%	1.23%

Earnings & Valuation

This table compares Private Bancorp of America and China Merchants Bank”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Private Bancorp of America	$133.06 million	3.69	$40.67 million	$7.70	11.14
China Merchants Bank	$65.04 billion	2.53	$20.89 billion	$4.15	7.86

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

Volatility & Risk

Private Bancorp of America has a beta of 0.07, meaning that its share price is 93% less volatile than the S&P 500. Comparatively, China Merchants Bank has a beta of 0.2, meaning that its share price is 80% less volatile than the S&P 500.

Institutional and Insider Ownership

13.5% of Private Bancorp of America shares are held by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and recommmendations for Private Bancorp of America and China Merchants Bank, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Private Bancorp of America	0	1	3	0	2.75
China Merchants Bank	0	1	0	0	2.00

Private Bancorp of America presently has a consensus target price of $93.67, suggesting a potential upside of 9.17%. Given Private Bancorp of America’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Private Bancorp of America is more favorable than China Merchants Bank.

Summary

Private Bancorp of America beats China Merchants Bank on 9 of the 13 factors compared between the two stocks.

About Private Bancorp of America

Private Bancorp of America, Inc. operates as the bank holding company for CalPrivate Bank that provides banking products and services to individuals and businesses in California. The company offers checking and savings, money market, certificate of deposit, sweep, zero balance, and individual retirement accounts; unsecured lines of credit, personal credit lines, and term loans; additional services, such as direct deposits, online banking, ATM and debit cards, credit cards, savings/line of credit overdraft protection, and safe deposit boxes; and certificate of deposit account registry services. It also provides treasury management, merchant card, bill pay, positive pay, e-statement, remote deposit capture, ACH origination, wire transfer, electronic payments and collections, electronic check acceptance, account reconciliation, cash vault, and gift and business credit cards, as well as funds management services. In addition, the company offers term credit facilities and loans, equipment and business expansion loans, working capital lines of credit, commercial real estate financing, construction financing, letters of credit, business start-up loans, loans for business acquisition and partner buyouts, owner-occupied commercial real estate loans, equipment, furniture and fixture, and other loans; and CDARS And ICS products. Further, it provides wealth management and legal services. The company has offices in La Jolla, San Diego, Coronado, Newport Beach, Beverly Hills, El Segundo, Temecula, Mission Valley, and Redlands. Private Bancorp of America, Inc. was founded in 2006 and is headquartered in La Jolla, California.

About China Merchants Bank

China Merchants Bank Co., Ltd., together with its subsidiaries, provides various banking products and services. It operates through Wholesale Finance Business, Retail Finance Business, and Other Business segments. The company offers current, demand, time, call, savings, notice, and renminbi accounts. Its loan products include personal commercial real estate, consumption, housing, and car loans; loans to finance for studying abroad; micro-business loans; mortgage loans for equipment; joint guarantee, special guarantee, and housing mortgage loan; bank acceptance, discount, liquid capital, and fixed asset loans; and loans for vessels. The company also offers credit cards; insurance products; open-ended funds; discount and guarantees for commercial bills, redemption of commercial bills, and guaranteed discount for commercial acceptance bills; and financial consultation, debt financing underwriting, merger and acquisition financing, and equity financing and enterprise listing services. In addition, it provides forfeiting and risk participation, escrow, cross-border RMB clearing, and interbank services; and risk and financial management, cross-border RMB and oversea financing, international factoring and settlement, and trade finance services. Further, the company offers financial leasing and guarantee, investment and wealth management, forex option and gold trading, forex express trading, international, offshore and private banking, custody, pension, and electronic banking services. The company also operates in Hong Kong, New York, London, Singapore, Luxembourg, Sydney, and Taipei. China Merchants Bank Co., Ltd. was founded in 1987 and is headquartered in Shenzhen, China.