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, supporting its substantial fee-based revenue.

The company serves individuals, small and medium-sized companies, corporate clients, and large companies.

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 2.5% from $18.74 to $21.10 as of Friday’s market close.

If Banco De Chile’s stock trades in the range of $17.00 to $25.00 this next year, its recent $21.10 share price might rise to $23.50 by next year. Of course, BCH’s price could drop about the same $2.40 estimated amount, or more.

My upside estimate of $2.40, however, is $0.10 under the median target price estimate from ten analysts tracking the stock for brokers.

BCH Dividend

Banco De Chile has paid variable annual dividends since March 13, 2002 (except for 2021). BCH's most recent A dividend, paid March 30th to shareholders of record March 16th, was $2.15. Its estimated forward yield is 10.18% per Friday’s closing price.

BCH Returns

Adding the $2.15 anticipated annual dividend to Banco De Chile’s  estimated $2.40 possible price upside, reveals a $4.55 potential gross gain per share for the coming year.

At Friday’s $21.10 closing price, a little over $1000 would buy 48 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 $4.55 gross gain per share makes a net gain of $4.34 X 48 shares = $208.32 or about a 20.75% net gain.

This may be the time to pounce on Banco De Chile shares. But beware, BCH is an established financial company doing business in a volatile environment. However, the recently estimated $101.80 dividend from $1000 invested comes in at about 4.8 times the recent $21.10 single share price. The choice is yours.

Remember the true value of any stock is best realized by your personal ownership of shares.

More By This Author:

Current Analysis: Kraft Heinz
Stock Analysis: Imperial Brands
Stock Analysis: Hengan International Group