Credicorp (NYSE:BAP) and Banco Santander Brasil (NYSE:BSBR) are both large-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, earnings, analyst recommendations, dividends, valuation, profitability and institutional ownership.

Dividends

Credicorp pays an annual dividend of $4.39 per share and has a dividend yield of 2.0%. Banco Santander Brasil pays an annual dividend of $0.14 per share and has a dividend yield of 1.3%. Credicorp pays out 27.9% of its earnings in the form of a dividend. Banco Santander Brasil pays out 19.2% 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. Credicorp has raised its dividend for 3 consecutive years. Credicorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of current recommendations for Credicorp and Banco Santander Brasil, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Credicorp 0 1 3 0 2.75
Banco Santander Brasil 0 3 0 0 2.00

Credicorp presently has a consensus price target of $258.00, indicating a potential upside of 18.43%. Banco Santander Brasil has a consensus price target of $12.00, indicating a potential upside of 11.73%. Given Credicorp’s stronger consensus rating and higher probable upside, analysts plainly believe Credicorp is more favorable than Banco Santander Brasil.

Institutional & Insider Ownership

66.7% of Credicorp shares are owned by institutional investors. Comparatively, 1.1% of Banco Santander Brasil shares are owned by institutional investors. 15.9% of Credicorp shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Credicorp and Banco Santander Brasil’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Credicorp 26.62% 19.58% 2.58%
Banco Santander Brasil 12.16% 11.68% 1.56%

Risk and Volatility

Credicorp has a beta of 0.91, suggesting that its share price is 9% less volatile than the S&P 500. Comparatively, Banco Santander Brasil has a beta of 1.53, suggesting that its share price is 53% more volatile than the S&P 500.

Valuation and Earnings

This table compares Credicorp and Banco Santander Brasil’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Credicorp $4.83 billion 3.60 $1.25 billion $15.74 13.84
Banco Santander Brasil $27.39 billion 1.47 $2.80 billion $0.73 14.71

Banco Santander Brasil has higher revenue and earnings than Credicorp. Credicorp is trading at a lower price-to-earnings ratio than Banco Santander Brasil, indicating that it is currently the more affordable of the two stocks.

Summary

Credicorp beats Banco Santander Brasil on 12 of the 17 factors compared between the two stocks.

Credicorp Company Profile

Credicorp Ltd., through its banking and non-banking subsidiaries, provides a range of financial, insurance, and health services and products primarily in Peru and internationally. It operates through four segments: Banking, Insurance, Pension Funds, and Investment Banking. The company offers deposits, current accounts, loans, and credit facilities; and provides private pension fund management services to affiliated pensioners. It also issues insurance policies to cover losses in commercial property, transportation, marine vessels, automobile, life, health, and pension funds. In addition, the company offers investment brokerage and management services to corporations, institutional investors, governments, and foundations; and engages in structuring and placement of issues in the primary market, as well as the execution and negotiation of operations in the secondary market. Further, it structures securitization processes for companies; and manages mutual funds. Credicorp Ltd. was incorporated in 1995 and is based in Hamilton, Bermuda.

Banco Santander Brasil Company Profile

Banco Santander (Brasil) S.A. provides banking products and services in Brazil and internationally. The company operates in two segments, Commercial Banking and Global Wholesale Banking. It offers savings and investment products, annuities, loans and advances, mortgage loans, credit cards, pension plans, and social securities, as well as leasing and foreign exchange services. The company also provides payment, securities and insurance brokerage, capitalization, buying club management, securitization, credit and recovery management, resource management, and other services. Banco Santander (Brasil) S.A. was incorporated in 1985 and is headquartered in São Paulo, Brazil.

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