Head to Head Comparison: China Merchants Bank (OTCMKTS:CIHKY) and Runway Growth Finance (NASDAQ:RWAY)

China Merchants Bank (OTCMKTS:CIHKYGet Free Report) and Runway Growth Finance (NASDAQ:RWAYGet Free Report) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, profitability, dividends, risk, analyst recommendations, earnings and institutional ownership.

Institutional and Insider Ownership

64.6% of Runway Growth Finance shares are held by institutional investors. 1.0% of Runway Growth Finance shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

China Merchants Bank pays an annual dividend of $1.04 per share and has a dividend yield of 4.4%. Runway Growth Finance pays an annual dividend of $1.60 per share and has a dividend yield of 13.5%. China Merchants Bank pays out 26.6% of its earnings in the form of a dividend. Runway Growth Finance pays out 145.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Runway Growth Finance has increased its dividend for 2 consecutive years. Runway Growth Finance is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

Net Margins Return on Equity Return on Assets
China Merchants Bank 29.99% 14.92% 1.33%
Runway Growth Finance 26.93% 14.17% 7.34%

Earnings & Valuation

This table compares China Merchants Bank and Runway Growth Finance’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
China Merchants Bank $70.40 billion 1.68 $20.74 billion $3.91 5.99
Runway Growth Finance $164.21 million 2.85 $44.34 million $1.10 10.79

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

Volatility and Risk

China Merchants Bank has a beta of 0.36, meaning that its stock price is 64% less volatile than the S&P 500. Comparatively, Runway Growth Finance has a beta of 0.65, meaning that its stock price is 35% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for China Merchants Bank and Runway Growth Finance, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
China Merchants Bank 0 0 0 0 N/A
Runway Growth Finance 0 6 1 0 2.14

Runway Growth Finance has a consensus target price of $12.65, indicating a potential upside of 6.57%. Given Runway Growth Finance’s higher probable upside, analysts plainly believe Runway Growth Finance is more favorable than China Merchants Bank.

Summary

Runway Growth Finance beats China Merchants Bank on 10 of the 16 factors compared between the two stocks.

About China Merchants Bank

(Get Free Report)

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.

About Runway Growth Finance

(Get Free Report)

Runway Growth Finance Corp. is a business development company specializing investments in senior-secured loans to late stage and growth companies. It prefers to make investments in companies engaged in the technology, life sciences, healthcare and information services, business services and select consumer services and products sectors. It prefers to investments in companies engaged in electronic equipment and instruments, systems software, hardware, storage and peripherals and specialized consumer services, application software, healthcare technology, internet software and services, data processing and outsourced services, internet retail, human resources and employment services, biotechnology, healthcare equipment and education services. It invests in senior secured loans between $10 million and $75 million.

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