Operating under three separate brand names (Banco de Chile, Banco Edwards-Citi, and Banco CrediChile) Banco de Chile (BCH) is the second largest in the country by loans and third largest by deposits.

Banco de Chile generates most of its net interest income (roughly 60% of total revenue) from its mortgage, unsecured consumer credit lines, and commercial loans, with 25% of its outstanding loans being made to firms with more than 10,000 million CLP in revenue.

Outside of its banking business, Banco de Chile is the largest asset manager in the country and one of the largest security brokerages, generating substantial fee-based revenue.

Banco de Chile was founded in 1893 and is headquartered in Santiago, Chile.

Three key data points gauge Banco de Chile or any dividend-paying firm. The key three are:

(1) Price

(2) Dividends

(3) Returns

Those three basic keys best tell whether any company has made, is making, and will make money.

BCH Price

Over the past year, BCH’s share price rose about 8.2% from $19.87 to $21.50 as of Friday’s market close. Since our last coverage in May, it has dropped no lower than $20 and gone as high as $23.3.

If BCH’s stock trades in the range of $17.00 to $24.00 this next year, its recent $21.50 share price might rise to $23.50 by next year. Of course, BCH’s price could drop about the same $2.00 amount, or more.

My upside estimate of $2.00, however, is aligned with the median of target estimates from 10 analysts who track the stock for brokers.

BCH Dividend

BCH’s annual dividends have been paid since 2002. BCH’s most recent dividend, paid March 30th to shareholders of record March 13, was $2.15.  So, BCH’s  annual dividend payout is projected to yield 10% per Friday’s closing price.

BCH Returns

Adding the $2.15  anticipated annual dividend to Banco de Chile’s estimated $2.00 price upside, reveals a $4.15 potential gross gain per share for the coming year.

At Friday’s $21.50 closing price, a little over $1000 would buy 47 shares.

A $10 broker fee (if charged), paid half at purchase and half at sale, might cost us about $0.21 per share.

Subtracting that maybe $0.21 brokerage cost from my estimated $4.15 gross gain per share makes a net gain amounting to $3.94 X 47 shares = $185.18 for about a 18.5% net gain.

This may be the time to pounce on Banco de Chile shares. But beware, BCH is a foreign stock. Furthermore, the estimated $100.00 dividend from $1000 invested comes in at over 4.5 time greater than the recent single share price. The choice is yours.

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