China Construction Bank (OTCMKTS:CICHY) versus First United (NASDAQ:FUNC) Financial Survey

China Construction Bank (OTCMKTS:CICHY) and First United (NASDAQ:FUNC) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, earnings, analyst recommendations, dividends, profitability, risk and valuation.

Dividends

China Construction Bank pays an annual dividend of $0.94 per share and has a dividend yield of 3.8%. First United pays an annual dividend of $1.04 per share and has a dividend yield of 2.4%. China Construction Bank pays out 25.3% of its earnings in the form of a dividend. First United pays out 26.9% 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. First United has increased its dividend for 6 consecutive years. China Construction Bank is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

China Construction Bank has a beta of 0.11, suggesting that its stock price is 89% less volatile than the S&P 500. Comparatively, First United has a beta of 0.51, suggesting that its stock price is 49% less volatile than the S&P 500.

Insider and Institutional Ownership

33.3% of First United shares are owned by institutional investors. 8.1% of First United shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and price targets for China Construction Bank and First United, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
China Construction Bank	0	1	0	0	2.00
First United	0	0	3	0	3.00

First United has a consensus target price of $49.50, indicating a potential upside of 15.08%. Given First United’s stronger consensus rating and higher possible upside, analysts clearly believe First United is more favorable than China Construction Bank.

Profitability

This table compares China Construction Bank and First United’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
China Construction Bank	27.65%	9.82%	0.78%
First United	20.05%	13.69%	1.36%

Earnings and Valuation

This table compares China Construction Bank and First United”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
China Construction Bank	$181.98 billion	1.76	$47.15 billion	$3.72	6.58
First United	$121.42 million	2.29	$24.51 million	$3.86	11.14

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

Summary

First United beats China Construction Bank on 12 of the 17 factors compared between the two stocks.

About China Construction Bank

China Construction Bank Corporation provides various banking and related financial services to individuals and corporate customers in the People's Republic of China and internationally. It operates through Corporate Finance Business, Personal Finance Business, Treasury and Asset Management Business, and Others segments. The company accepts various deposits, such as foreign currency, all in one accounts, RMB, corporate term and notification, and corporate demand deposits, as well corporate deposits by agreement. Its loan products include personal business, car, and housing loans; and SME, traditional credit, commercial draft, buyer credit, and RMB credit line loans. The company also offers credit cards; physical gold for personal investment and personal gold accounts; foreign exchange services; certificate treasury and savings bonds, securities deposit accounts, and securities services, as well as bank-securities transfer and book-entry treasury bond over the counter transaction services; and wealth management products. In addition, it provides collection, salaries payment, third-party collection and payment, insurance agency, and remittance services; international settlement and financing, and FI services; securities and fund settlement services; guarantee-based, consulting and advising, and factoring services; fund custody services; and e-banking services. Further, the company offers institutional services comprising services for government agencies, social security, banks cooperation, bank-securities cooperation, bank-insurance cooperation, and services for non-banking financial institutions. China Construction Bank Corporation was founded in 1954 and is headquartered in Beijing, the People's Republic of China.

About First United

First United Corporation operates as the bank holding company for First United Bank & Trust that provides various retail and commercial banking services to businesses and individuals. It offers various deposit products, which includes checking, savings, money market deposit, and regular and individual retirement accounts (IRAs), as well as certificates of deposit. The company loan portfolio includes commercial loans secured by real estate, commercial equipment, vehicles, or other assets of the borrower; commercial real estate loans for residential and commercial development, agricultural purpose properties, and service industry buildings, such as restaurants and motels, retail buildings, and general purpose business space; residential mortgage loans; home equity lines of credit; residential real estate construction loans; and indirect and direct auto loans, student loans, and other secured and unsecured lines of credit and term loans. It also offers access to multi-million-dollar certificates of deposit and the Intrafi cash service, including multi-million-dollar savings and demand deposits to municipalities, businesses, and consumers; and treasury management, cash sweep, and various checking services. In addition, the company provides trust services, which includes personal trust, investment agency accounts, charitable trusts, retirement accounts, including IRA roll-overs, 401(k) accounts and defined benefit plans, estate administration, and estate planning; and insurance products, brokerage services, and safe deposit and night depository facilities. First United Corporation was founded in 1900 and is headquartered in Oakland, Maryland.