Critical Survey: BOC Hong Kong (OTCMKTS:BHKLY) vs. Royal Bank of Canada (NYSE:RY)

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

Insider and Institutional Ownership

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

Profitability

This table compares Royal Bank of Canada and BOC Hong Kong’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Royal Bank of Canada	12.08%	15.26%	0.84%
BOC Hong Kong	N/A	N/A	N/A

Risk & Volatility

Royal Bank of Canada has a beta of 0.87, indicating that its share price is 13% less volatile than the S&P 500. Comparatively, BOC Hong Kong has a beta of 0.23, indicating that its share price is 77% less volatile than the S&P 500.

Dividends

Royal Bank of Canada pays an annual dividend of $4.11 per share and has a dividend yield of 3.5%. BOC Hong Kong pays an annual dividend of $2.89 per share and has a dividend yield of 4.2%. Royal Bank of Canada pays out 49.8% of its earnings in the form of a dividend. Royal Bank of Canada has raised its dividend for 14 consecutive years.

Analyst Ratings

This is a summary of current ratings and price targets for Royal Bank of Canada and BOC Hong Kong, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Royal Bank of Canada	0	1	5	1	3.00
BOC Hong Kong	0	0	0	0	0.00

Royal Bank of Canada presently has a consensus target price of $156.50, suggesting a potential upside of 31.60%. Given Royal Bank of Canada’s stronger consensus rating and higher possible upside, analysts plainly believe Royal Bank of Canada is more favorable than BOC Hong Kong.

Valuation & Earnings

This table compares Royal Bank of Canada and BOC Hong Kong”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Royal Bank of Canada	$57.49 billion	2.93	$11.92 billion	$8.26	14.40
BOC Hong Kong	$18.66 billion	1.97	$4.36 billion	N/A	N/A

Royal Bank of Canada has higher revenue and earnings than BOC Hong Kong.

Summary

Royal Bank of Canada beats BOC Hong Kong on 13 of the 15 factors compared between the two stocks.

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.

About BOC Hong Kong

BOC Hong Kong (Holdings) Limited, an investment holding company, provides banking and related financial services to corporate and individual customers in Hong Kong, China, and internationally. The company operates through four segments: Personal Banking, Corporate Banking, Treasury, and Insurance. It offers savings, current, and time deposit accounts; mortgage plans; corporate deposits, and payroll and e-cheques services. The company also offers cross-border financial and remittance services; and securities, funds, foreign exchange services, precious metals and FX margin services, currency linked investments, bonds, market information services, monthly savings plans, and structured products, as well as business and personal loans. In addition, it provides business and accident protection, medical, travel and leisure, family protection, RMB, and personal life insurance products; and credit cards. Further, the company offers safe deposit box, e-bill, and payment services; personal and corporate RMB, and RMB clearing bank services; business comprehensive, property, liability, group, and retailer comprehensive insurance plans; small business, asset-pledge, and syndicated loans; accounts receivable, machinery and equipment, SME green, and project financing; cross-border services for corporate customers; business banking, trade finance and services, investment, treasury, corporate collection and payment, e-commerce, and card services; and custody and cash management services. Additionally, it provides wealth management and overdraft services; mandatory provident fund schemes; and private and corporate banking services, as well as internet, phone, and mobile banking services; and trade related products and other credit facilities. BOC Hong Kong (Holdings) Limited was founded in 1917 and is based in Central, Hong Kong. BOC Hong Kong (Holdings) Limited operates as a subsidiary of BOC Hong Kong (BVI) Limited.