Financial Comparison: Industrial & Commercial Bank of China Ltd. (OTCMKTS:IDCBY) & Royal Bank Of Canada (NYSE:RY)

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

Risk & Volatility

Industrial & Commercial Bank of China Ltd. has a beta of 0.18, suggesting that its stock price is 82% less volatile than the S&P 500. Comparatively, Royal Bank Of Canada has a beta of 0.86, suggesting that its stock price is 14% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Industrial & Commercial Bank of China Ltd. and Royal Bank Of Canada, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Industrial & Commercial Bank of China Ltd.	0	0	0	0	0.00
Royal Bank Of Canada	0	6	6	0	2.50

Royal Bank Of Canada has a consensus target price of $177.50, suggesting a potential upside of 20.79%. Given Royal Bank Of Canada’s stronger consensus rating and higher probable upside, analysts clearly believe Royal Bank Of Canada is more favorable than Industrial & Commercial Bank of China Ltd..

Insider and Institutional Ownership

45.3% of Royal Bank Of Canada shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Industrial & Commercial Bank of China Ltd.	23.66%	9.11%	0.73%
Royal Bank Of Canada	14.03%	16.12%	0.89%

Valuation & Earnings

This table compares Industrial & Commercial Bank of China Ltd. and Royal Bank Of Canada”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Industrial & Commercial Bank of China Ltd.	$219.33 billion	1.19	$50.89 billion	$2.69	5.42
Royal Bank Of Canada	$98.71 billion	2.09	$11.92 billion	$9.47	15.52

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

Dividends

Industrial & Commercial Bank of China Ltd. pays an annual dividend of $0.71 per share and has a dividend yield of 4.9%. Royal Bank Of Canada pays an annual dividend of $4.53 per share and has a dividend yield of 3.1%. Industrial & Commercial Bank of China Ltd. pays out 26.4% of its earnings in the form of a dividend. Royal Bank Of Canada pays out 47.8% 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. Royal Bank Of Canada has raised its dividend for 15 consecutive years. Industrial & Commercial Bank of China Ltd. is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Royal Bank Of Canada beats Industrial & Commercial Bank of China Ltd. on 11 of the 16 factors compared between the two stocks.

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.

About Royal Bank Of Canada

Royal Bank of Canada operates as a diversified financial service company worldwide. The company's Personal & Commercial Banking segment offers checking and savings accounts, home equity financing, personal lending, private banking, indirect lending, including auto financing, mutual funds and self-directed brokerage accounts, guaranteed investment certificates, credit cards, and payment products and solutions; and lending, leasing, deposit, investment, foreign exchange, cash management, auto dealer financing, trade products, and services to small and medium-sized commercial businesses. This segment offers financial products and services through branches, automated teller machines, and mobile sales network. Its Wealth Management segment provides a suite of wealth, investment, trust, banking, credit, and other advice-based solutions and strategies to high net worth and ultra-high net worth individuals, and institutional clients; asset management products to institutional and individual clients; and asset and investor services to financial institutions, asset managers, and asset owners. The company's Insurance segment offers life, health, home, auto, travel, wealth, annuities, property and casualty, and reinsurance advice and solutions; and business insurance services to individual, business, and group clients through its advice centers, RBC insurance stores, and mobile advisors; digital platforms; and independent brokers and partners. The company's Capital Markets segment offers advisory and origination, sales and trading, lending and financing, and transaction banking services to corporations, institutional clients, asset managers, private equity firms, and governments. The company was founded in 1864 and is headquartered in Toronto, Canada.