Head-To-Head Analysis: Greentown China (OTCMKTS:GTWCF) and China Evergrande Group (OTCMKTS:EGRNF)

Greentown China (OTCMKTS:GTWCF) and China Evergrande Group (OTCMKTS:EGRNF) are both real estate companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, analyst recommendations, valuation, dividends, risk, profitability and institutional ownership.

Profitability

This table compares Greentown China and China Evergrande Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Greentown China	N/A	N/A	N/A
China Evergrande Group	N/A	N/A	N/A

Valuation & Earnings

This table compares Greentown China and China Evergrande Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Greentown China	N/A	N/A	N/A	$1.55	0.62
China Evergrande Group	N/A	N/A	N/A	$0.87	N/A

China Evergrande Group is trading at a lower price-to-earnings ratio than Greentown China, indicating that it is currently the more affordable of the two stocks.

Dividends

Greentown China pays an annual dividend of $0.43 per share and has a dividend yield of 45.1%. China Evergrande Group pays an annual dividend of $0.57 per share. Greentown China pays out 27.9% of its earnings in the form of a dividend. China Evergrande Group pays out 65.7% 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. Greentown China is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of recent ratings for Greentown China and China Evergrande Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Greentown China	0	0	1	0	3.00
China Evergrande Group	0	0	0	0	0.00

Given China Evergrande Group’s higher possible upside, analysts clearly believe China Evergrande Group is more favorable than Greentown China.

Insider & Institutional Ownership

5.9% of Greentown China shares are held by institutional investors. Comparatively, 8.2% of China Evergrande Group shares are held by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Greentown China beats China Evergrande Group on 5 of the 8 factors compared between the two stocks.

About Greentown China

Greentown China Holdings Limited, an investment holding company, engages in the property development and related business in China. It operates through Property Development, Hotel Operations, Property Investment, Project Management, and Other segments. The company develops and sells residential properties. It also offers investment and asset management; project management; technology research and development; and design and decoration services. In addition, the company constructs, develops, and operates education projects; operates hotels and clubs; and invests in and rents properties, as well as sells construction materials. The company was founded in 1995 and is headquartered in Hangzhou, the People's Republic of China.

About China Evergrande Group

China Evergrande Group, an investment holding company, primarily engages in the property development business in the People’s Republic of China. It operates through Property Development, Property Investment, Property Management Services, and Other Businesses segments. The company offers property development, investment, and management services; and engages in new energy vehicle, cultural tourism, and health industry business. It also provides sale and manufacturing of smart mobility; and development and sale of health and living projects, as well as develops and operates real estate. The company was incorporated in 2006 and is headquartered in Guangzhou, the People’s Republic of China. China Evergrande Group operates as a subsidiary of Xin Xin (BVI) Limited.