Head to Head Review: Banco Itau Chile Spon (NASDAQ:ITCLY) and Bank of Montreal (NYSE:BMO)

Bank of Montreal (NYSE:BMO) and Banco Itau Chile Spon (NASDAQ:ITCLY) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, dividends, institutional ownership, risk, earnings, profitability and analyst recommendations.

Analyst Recommendations

This is a breakdown of current recommendations for Bank of Montreal and Banco Itau Chile Spon, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bank of Montreal	0	8	2	0	2.20
Banco Itau Chile Spon	0	0	0	0	0.00

Bank of Montreal currently has a consensus price target of $119.75, suggesting a potential upside of 27.26%. Given Bank of Montreal’s stronger consensus rating and higher probable upside, analysts plainly believe Bank of Montreal is more favorable than Banco Itau Chile Spon.

Dividends

Bank of Montreal pays an annual dividend of $4.58 per share and has a dividend yield of 4.9%. Banco Itau Chile Spon pays an annual dividend of $0.17 per share and has a dividend yield of 5.5%. Bank of Montreal pays out 72.1% of its earnings in the form of a dividend. Banco Itau Chile Spon pays out 25.8% 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 Itau Chile Spon is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Bank of Montreal and Banco Itau Chile Spon’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bank of Montreal	8.50%	11.23%	0.60%
Banco Itau Chile Spon	10.54%	10.65%	0.91%

Earnings and Valuation

This table compares Bank of Montreal and Banco Itau Chile Spon”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bank of Montreal	$50.48 billion	1.36	$3.24 billion	$6.35	14.82
Banco Itau Chile Spon	$3.99 billion	0.50	$423.68 million	$0.66	4.70

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

Institutional and Insider Ownership

45.8% of Bank of Montreal shares are held by institutional investors. Comparatively, 22.2% of Banco Itau Chile Spon shares are held by institutional investors. 1.0% of Bank of Montreal shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Bank of Montreal beats Banco Itau Chile Spon on 11 of the 15 factors compared between the two stocks.

About Bank of Montreal

Bank of Montreal provides diversified financial services primarily in North America. It operates through Canadian P&C, U.S P&C, BMO Wealth Management, and BMO Capital Markets segments. The company’s personal banking products and services include deposits, mortgages, home lending, consumer credit, small business lending, credit cards, cash management, financial and investment advice, and other banking services; and commercial banking products and services comprise various of financing options and treasury and payment solutions, as well as risk management products. It also offers investing, banking, and wealth management advisory; digital investing services; financial solutions for individuals, families, and businesses; provides investment management services to institutional, retail, and high net worth investors; and diversified insurance, and wealth and pension de-risking solutions. In addition, the company provides individual life, critical illness and annuity products, as well as segregated funds, and group creditor and travel insurance to customers; debt and equity capital-raising, loan origination and syndication, balance sheet management, treasury management, mergers and acquisitions advice, restructurings and recapitalizations, trade finance, and risk mitigation services, as well as a range of banking and other operating services. Further, the company offers research and access to financial markets for institutional, corporate and retail clients through an integrated suite of sales and trading solutions related to debt, foreign exchange, interest rates, credit, equities, securitization, and commodities; provides new product development and origination services, as well as risk management and advisory services for hedging strategies, including in interest rates, foreign exchange rates and commodities prices; and funding and liquidity management services. The company was founded in 1817 and is headquartered in Montreal, Canada.

About Banco Itau Chile Spon

Banco Ita? Chile provides banking services principally in Chile and Colombia. It provides wholesale and corporate banking; real estate and construction and retail, private, companies and personal banking services, as well as treasury and other financial services. Banco Ita? Chile, formerly known as Ita? Corpbanca, is based in Santiago, Chile.