Critical Comparison: China Construction Bank (OTCMKTS:CICHY) vs. Lake Shore Bancorp (NASDAQ:LSBK)
by Renee Jackson · The Cerbat GemLake Shore Bancorp (NASDAQ:LSBK – Get Free Report) and China Construction Bank (OTCMKTS:CICHY – Get Free Report) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, valuation, earnings, analyst recommendations and dividends.
Dividends
Lake Shore Bancorp pays an annual dividend of $0.36 per share and has a dividend yield of 1.9%. China Construction Bank pays an annual dividend of $0.94 per share and has a dividend yield of 3.8%. Lake Shore Bancorp pays out 31.9% of its earnings in the form of a dividend. China Construction Bank pays out 25.3% 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. China Construction Bank is clearly the better dividend stock, given its higher yield and lower payout ratio.
Analyst Recommendations
This is a summary of recent ratings and price targets for Lake Shore Bancorp and China Construction Bank, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Lake Shore Bancorp | 0 | 0 | 0 | 1 | 4.00 |
| China Construction Bank | 0 | 1 | 0 | 0 | 2.00 |
Risk and Volatility
Lake Shore Bancorp has a beta of 0.3, indicating that its share price is 70% less volatile than the S&P 500. Comparatively, China Construction Bank has a beta of 0.1, indicating that its share price is 90% less volatile than the S&P 500.
Profitability
This table compares Lake Shore Bancorp and China Construction Bank’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Lake Shore Bancorp | 20.62% | 5.84% | 1.15% |
| China Construction Bank | 27.65% | 9.82% | 0.78% |
Valuation and Earnings
This table compares Lake Shore Bancorp and China Construction Bank”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Lake Shore Bancorp | $39.56 million | 3.71 | $7.27 million | $1.13 | 16.56 |
| China Construction Bank | $181.98 billion | 1.79 | $47.15 billion | $3.72 | 6.69 |
China Construction Bank has higher revenue and earnings than Lake Shore Bancorp. China Construction Bank is trading at a lower price-to-earnings ratio than Lake Shore Bancorp, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
8.7% of Lake Shore Bancorp shares are held by institutional investors. 8.4% of Lake Shore Bancorp shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Summary
Lake Shore Bancorp beats China Construction Bank on 8 of the 15 factors compared between the two stocks.
About Lake Shore Bancorp
Lake Shore Bancorp, Inc. operates as a savings and loan holding company for Lake Shore Servings Bank. It offers personal services such as checking, savings, lending, banking, debit card, e-services, and online banking; and business services including deposit products, commercial loans, and business e-statements. The company was founded in 2006 and is headquartered in Dunkirk, NY.
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.