Monthly Archives: January 2020

Banco De Chile

Ticker: BCH, Buy below $22.

Banco De Chile  is a Chilean bank and financial services company.

Why I Would Buy

  1. Contrarian Buy – Dislocation in Chile has led to a double whammy: the stock has crashed; additionally Chilean Peso has crashed against the US Dollar.   
  2. Credit Rating – Banco De Chile’s credit ratings on long-term foreign currency debt was high investment grade.
  3. Dividend – 4% yield, payout ratio at about 60%..
  4. Return on Equity: BCH has earned ~10% returns on equity  for most of last decade

What Could Go Wrong

  1. Chilean Social Unrest – Severity of Chilean social crisis is unknown. Result of the constitutional rewrite could be severe socialism, and wipe out all private investments.
  2. High Dividend Taxes – Chile extracts very high taxes of 35% on dividends.

Disclosure: I am long BCH, please read additional disclosures here before taking any action based on this post.