China Merchants Bank (OTCMKTS:CIHKY) vs. Independent Bank (NASDAQ:INDB) Head-To-Head Review

Independent Bank (NASDAQ:INDB) and China Merchants Bank (OTCMKTS:CIHKY) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, earnings, valuation, profitability, risk and dividends.

Earnings and Valuation

This table compares Independent Bank and China Merchants Bank”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Independent Bank	$1.17 billion	3.39	$205.12 million	$6.75	12.40
China Merchants Bank	$65.04 billion	2.58	$20.89 billion	$4.15	8.01

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

Dividends

Independent Bank pays an annual dividend of $2.56 per share and has a dividend yield of 3.1%. China Merchants Bank pays an annual dividend of $1.18 per share and has a dividend yield of 3.5%. Independent Bank pays out 37.9% of its earnings in the form of a dividend. China Merchants Bank pays out 28.4% 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. Independent Bank has increased its dividend for 15 consecutive years. China Merchants Bank is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Independent Bank and China Merchants Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Independent Bank	24.27%	9.61%	1.36%
China Merchants Bank	32.69%	12.45%	1.23%

Insider and Institutional Ownership

83.4% of Independent Bank shares are owned by institutional investors. 1.6% of Independent Bank shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk and Volatility

Independent Bank has a beta of 0.78, meaning that its share price is 22% less volatile than the S&P 500. Comparatively, China Merchants Bank has a beta of 0.18, meaning that its share price is 82% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for Independent Bank and China Merchants Bank, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Independent Bank	1	0	4	2	3.00
China Merchants Bank	0	1	0	0	2.00

Independent Bank currently has a consensus target price of $91.86, indicating a potential upside of 9.75%. Given Independent Bank’s stronger consensus rating and higher probable upside, research analysts plainly believe Independent Bank is more favorable than China Merchants Bank.

Summary

Independent Bank beats China Merchants Bank on 12 of the 18 factors compared between the two stocks.

About Independent Bank

Independent Bank Corp. operates as the bank holding company for Rockland Trust Company that provides commercial banking products and services to individuals and small-to-medium sized businesses in the United States. The company provides interest checking, money market, and savings accounts, as well as demand deposits and time certificates of deposit. It offers commercial real estate and construction, commercial and industrial, small business, secured and unsecured commercial, and consumer real estate loans; term loans and revolving/nonrevolving lines of credit; overdraft protection and letters of credit; and residential mortgages and home equity loans and lines. In addition, the company provides cash management services, such as ACH transaction processing, positive pay, and remote deposit services; investment management and trust services to individuals, institutions, small businesses, and charitable institutions; mobile, online, and telephone banking; estate settlement, financial planning, tax services, and other services; automated teller machines; debit and credit cards; and mutual fund and unit investment trust shares, third party model portfolios, general securities, fixed and variable annuities, and life insurance products, as well as advisory platforms. Further, it invests in low-income housing tax credit projects; holds, maintains, and disposes foreclosed properties; and operates as an investment advisor. Independent Bank Corp. was founded in 1907 and is headquartered in Rockland, Massachusetts.

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.