Boc Hong Kong (BHKLY) versus Westpac Banking (WBK) Critical Review

Westpac Banking (NYSE:WBK) and Boc Hong Kong (OTCMKTS:BHKLY) are both large-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, valuation, institutional ownership, risk, profitability, dividends and earnings.

Risk and Volatility

Westpac Banking has a beta of 1.19, suggesting that its stock price is 19% more volatile than the S&P 500. Comparatively, Boc Hong Kong has a beta of 1.23, suggesting that its stock price is 23% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and price targets for Westpac Banking and Boc Hong Kong, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Westpac Banking 3 3 2 0 1.88
Boc Hong Kong 0 0 0 1 4.00

Valuation and Earnings

This table compares Westpac Banking and Boc Hong Kong’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Westpac Banking $28.76 billion 2.20 $6.16 billion $1.74 10.70
Boc Hong Kong $10.08 billion 4.11 $3.99 billion N/A N/A

Westpac Banking has higher revenue and earnings than Boc Hong Kong.

Institutional and Insider Ownership

0.5% of Westpac Banking shares are held by institutional investors. Comparatively, 0.2% of Boc Hong Kong shares are held by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Westpac Banking and Boc Hong Kong’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Westpac Banking N/A N/A N/A
Boc Hong Kong N/A N/A N/A

Dividends

Westpac Banking pays an annual dividend of $1.33 per share and has a dividend yield of 7.1%. Boc Hong Kong pays an annual dividend of $2.74 per share and has a dividend yield of 3.5%. Westpac Banking pays out 76.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Westpac Banking has raised its dividend for 2 consecutive years. Westpac Banking is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Westpac Banking beats Boc Hong Kong on 6 of the 11 factors compared between the two stocks.

Westpac Banking Company Profile

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 one, community solutions one, not-for-profit savings, and foreign currency accounts; term and farm management deposits; debit, credit, and travel money cards; home, personal, investment, small business, and commercial loans; and equipment, automotive, cash flow, property, insurance premium, corporate and structured finance, and trade and supply chain 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; instalment 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. 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.

Boc Hong Kong Company Profile

BOC Hong Kong (Holdings) Limited, an investment holding company, provides banking and related financial services to corporate and individual customers in Hong Kong, Mainland China, and internationally. It operates through four segments: Personal Banking, Corporate Banking, Treasury, and Insurance. The company offers savings, current, and time deposit accounts; mortgage plans; overdrafts; personal loans; personal life, family, medical and accident, travel and leisure, business protection, home, domestic helper, motor, and golfer insurance products; wealth management services; and Internet, phone, and mobile banking services. It also provides credit card, remittance, autopay, and trust services, as well as safe deposit boxes and gift cheques. In addition, the company offers commercial financing, machinery and equipment financing, and project financing and syndicated loans; business loans; SME loans; treasury products; cash management services; import and export trade finance services; e-commerce services; custody services; and business comprehensive, property, liability, group, and retailer comprehensive insurance plans. Further, it provides investment products and services, including securities, foreign exchange, fund, precious metals and FX margin, bonds, investment deposits, structured deposits, equity linked deposits, and premium and option linked deposits. The company operates approximately 197 branches and approximately 1,000 self-service machines. BOC Hong Kong (Holdings) Limited was founded in 1917 and is based in Central, Hong Kong. The company is considered a Red Chip company due to its listing on the Hong Kong Stock Exchange. BOC Hong Kong (Holdings) Limited is a subsidiary of BOC Hong Kong (BVI) Limited.

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