China Construction Bank (OTCMKTS:CICHY) and L'Oréal (OTCMKTS:LRLCY) are both large-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, earnings, valuation, profitability, analyst recommendations and risk.
Valuation & Earnings
This table compares China Construction Bank and L'Oréal's revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| China Construction Bank | $150.31 billion | 1.41 | $38.60 billion | N/A | N/A |
| L'Oréal | $33.46 billion | 6.82 | $4.20 billion | $1.25 | 65.32 |
China Construction Bank has higher revenue and earnings than L'Oréal.
Profitability
This table compares China Construction Bank and L'Oréal's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| China Construction Bank | 23.14% | 11.52% | 0.97% |
| L'Oréal | N/A | N/A | N/A |
Dividends
China Construction Bank pays an annual dividend of $0.76 per share and has a dividend yield of 4.5%. L'Oréal pays an annual dividend of $0.68 per share and has a dividend yield of 0.8%. L'Oréal pays out 54.4% of its earnings in the form of a dividend.
Analyst Recommendations
This is a summary of current ratings and target prices for China Construction Bank and L'Oréal, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| China Construction Bank | 0 | 0 | 1 | 0 | 3.00 |
| L'Oréal | 2 | 3 | 8 | 0 | 2.46 |
L'Oréal has a consensus price target of $76.00, suggesting a potential downside of 6.92%. Given L'Oréal's higher possible upside, analysts clearly believe L'Oréal is more favorable than China Construction Bank.
Institutional and Insider Ownership
0.0% of China Construction Bank shares are held by institutional investors. Comparatively, 0.7% of L'Oréal shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Risk and Volatility
China Construction Bank has a beta of 0.6, suggesting that its stock price is 40% less volatile than the S&P 500. Comparatively, L'Oréal has a beta of 0.53, suggesting that its stock price is 47% less volatile than the S&P 500.
Summary
China Construction Bank beats L'Oréal on 9 of the 14 factors compared between the two stocks.
