Banco de Chile (NYSE: FRC) and First Republic Bank (NYSE:FRC) are both large-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, risk, institutional ownership, earnings, valuation and profitability.
Risk & Volatility
Banco de Chile has a beta of 0.4, meaning that its stock price is 60% less volatile than the S&P 500. Comparatively, First Republic Bank has a beta of 0.84, meaning that its stock price is 16% less volatile than the S&P 500.
This table compares Banco de Chile and First Republic Bank’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Banco de Chile||25.06%||17.99%||1.75%|
|First Republic Bank||24.80%||11.73%||0.90%|
Earnings & Valuation
This table compares Banco de Chile and First Republic Bank’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Banco de Chile||$3.84 billion||3.78||$929.56 million||$5.53||15.48|
|First Republic Bank||$2.91 billion||5.57||$757.66 million||$4.31||23.85|
Banco de Chile has higher revenue and earnings than First Republic Bank. Banco de Chile is trading at a lower price-to-earnings ratio than First Republic Bank, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
1.3% of Banco de Chile shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Banco de Chile pays an annual dividend of $2.32 per share and has a dividend yield of 2.7%. First Republic Bank pays an annual dividend of $0.72 per share and has a dividend yield of 0.7%. Banco de Chile pays out 42.0% of its earnings in the form of a dividend. First Republic Bank pays out 16.7% 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. Banco de Chile has increased its dividend for 6 consecutive years and First Republic Bank has increased its dividend for 5 consecutive years. Banco de Chile is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a summary of recent recommendations for Banco de Chile and First Republic Bank, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Banco de Chile||3||2||1||0||1.67|
|First Republic Bank||0||9||5||0||2.36|
Banco de Chile currently has a consensus target price of $91.00, suggesting a potential upside of 6.31%. First Republic Bank has a consensus target price of $102.46, suggesting a potential downside of 0.33%. Given Banco de Chile’s higher probable upside, equities analysts plainly believe Banco de Chile is more favorable than First Republic Bank.
Banco de Chile beats First Republic Bank on 10 of the 16 factors compared between the two stocks.
About Banco de Chile
Banco de Chile provides various banking products and services to individuals, corporate clients, large companies, and small and medium-sized companies in Chile and internationally. The company operates through four segments: Retail, Wholesale, Treasury, and Subsidiaries. It offers checking accounts; personal, car, and mortgage loans; credit cards; credit lines; and investment products, such as fixed-term, automatic renewal, and tax benefit deposits, as well as stocks, portfolio management, voluntary retirement savings/mutual funds, foreign currency, and fixed income investment products. The company also provides insurance products and trust commissions, as well as financial consultancy services related to mergers and acquisitions, liabilities financing and restructuring, capital contribution, bonds and stocks emissions, and international business. In addition, it offers debt instruments; derivative contracts; and liquidity management, currency trading, foreign exchange transaction, international and treasury banking, securities brokerage, mutual fund and investment management, and securitization services, as well as payment management and collection services. Further, the company provides financing for importers and exporters; and factoring, leasing, express payment, electronic banking, and online payment services. It operates a network of approximately 423 branches and 1,453 ATMs. Banco de Chile was founded in 1855 and is headquartered in Santiago, Chile.
About First Republic Bank
First Republic Bank, together with its subsidiaries, provides private banking, private business banking, real estate lending, and wealth management services to clients in metropolitan areas of the United States. It operates through two segments, Commercial Banking and Wealth Management. The company offers deposit products, such as checking, money market checking, savings, and passbook deposits, as well as certificates of deposit. It also provides a range of lending products that comprise residential mortgage loans, home equity lines of credit, multifamily loans, commercial real estate loans, residential construction loans, personal loans, business loans, and smaller loans and lines of credit to businesses and individuals. The company's loans are secured by single family residences, multifamily buildings, and commercial real estate properties. In addition, it provides wealth management services, which include various investment strategies and products, trust and custody services, full service and online brokerage, financial and estate planning, and access to alternative investments, as well as investing, insurance, and foreign exchange services. As of December 31, 2017, the company offered its services through 76 offices, including 70 preferred banking licensed deposit-taking offices in San Francisco, Palo Alto, Los Angeles, Santa Barbara, Newport Beach, and San Diego, California; Portland, Oregon; Boston, Massachusetts; Palm Beach, Florida; Greenwich, Connecticut; and New York, New York, as well as 6 offices that provided lending, wealth management, and trust services. First Republic Bank was founded in 1985 and is headquartered in San Francisco, California.
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