Analyzing Chiba Bank (OTCMKTS:CHBAY) & NU (NYSE:NU)

Chiba Bank (OTCMKTS:CHBAY) and NU (NYSE:NU) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, profitability, valuation, analyst recommendations, dividends, earnings and risk.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Chiba Bank and NU, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chiba Bank	0	0	0	0	0.00
NU	0	2	11	1	2.93

NU has a consensus price target of $18.34, suggesting a potential upside of 10.34%. Given NU’s stronger consensus rating and higher possible upside, analysts clearly believe NU is more favorable than Chiba Bank.

Profitability

This table compares Chiba Bank and NU’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Chiba Bank	20.92%	7.53%	0.42%
NU	17.97%	30.12%	4.66%

Valuation and Earnings

This table compares Chiba Bank and NU”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chiba Bank	$2.38 billion	3.73	$490.11 million	$4.20	13.10
NU	$9.60 billion	8.34	$1.97 billion	$0.51	32.59

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

Dividends

Chiba Bank pays an annual dividend of $1.09 per share and has a dividend yield of 2.0%. NU pays an annual dividend of $1.67 per share and has a dividend yield of 10.0%. Chiba Bank pays out 26.0% of its earnings in the form of a dividend. NU pays out 327.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Insider and Institutional Ownership

84.0% of NU shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Volatility & Risk

Chiba Bank has a beta of 0.13, indicating that its share price is 87% less volatile than the S&P 500. Comparatively, NU has a beta of 1.08, indicating that its share price is 8% more volatile than the S&P 500.

Summary

NU beats Chiba Bank on 13 of the 16 factors compared between the two stocks.

About Chiba Bank

The Chiba Bank, Ltd., together with its subsidiaries, provides banking products and services in Japan and internationally. The company offers various deposit products, including savings, time deposits, currency deposits, investment trusts, bonds, and pensions; loans, which include mortgages, renovation loans, photovoltaic, vehicle, education, and other loan products; and insurance products, such as annuity, life, medical, student, death, and travel insurance. It also offers debit and credit cards, as well as internet banking services. In addition, the company engages in securities, investment management and advisory, software development, commissioned computation tasks, research and investigation of IT and financial technologies, leasing, operation, and management of investment funds, mergers and acquisition advisory, credit guarantee businesses, management and collection of claims businesses. Further, it provides loan guarantees and fee collection services; accounting, general administration entrustment, and temporary staff services; and is involved in outsourcing of operational business. Additionally, it rents and maintains office buildings and welfare facilities; provides research, survey, and consulting services; purchases and sells supplies and consumer goods; and engages in renewable energy generation. The company serves individuals and corporations. The Chiba Bank, Ltd. was incorporated in 1943 and is headquartered in Chiba City, Japan.

About NU

Nu Holdings Ltd. is a holding company, which engages in the provision of digital banking services. The company was founded by David Vélez Osorno, Cristina Helena Zingaretti Junqueira, and Adam Edward Wible on February 26, 2016 and is headquartered in George Town, Cayman Islands.