DNB ASA/S (OTCMKTS:DNHBY) and National Bank of Canada (OTCMKTS:NTIOF) are both large-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, dividends, institutional ownership, risk, valuation, earnings and analyst recommendations.

Dividends

DNB ASA/S pays an annual dividend of $0.72 per share and has a dividend yield of 3.6%. National Bank of Canada pays an annual dividend of $1.90 per share and has a dividend yield of 4.1%. DNB ASA/S pays out 46.5% of its earnings in the form of a dividend. National Bank of Canada pays out 45.6% 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. National Bank of Canada is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares DNB ASA/S and National Bank of Canada’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
DNB ASA/S $8.42 billion 3.79 $2.64 billion $1.55 12.88
National Bank of Canada $6.85 billion 2.29 $1.48 billion $4.17 11.14

DNB ASA/S has higher revenue and earnings than National Bank of Canada. National Bank of Canada is trading at a lower price-to-earnings ratio than DNB ASA/S, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares DNB ASA/S and National Bank of Canada’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
DNB ASA/S 32.86% 10.83% 0.85%
National Bank of Canada 20.48% 18.60% 0.86%

Institutional & Insider Ownership

0.1% of DNB ASA/S shares are owned by institutional investors. Comparatively, 0.1% of National Bank of Canada shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Volatility and Risk

DNB ASA/S has a beta of 0.65, indicating that its stock price is 35% less volatile than the S&P 500. Comparatively, National Bank of Canada has a beta of 1.34, indicating that its stock price is 34% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and target prices for DNB ASA/S and National Bank of Canada, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
DNB ASA/S 0 0 0 0 N/A
National Bank of Canada 0 1 0 0 2.00

Summary

National Bank of Canada beats DNB ASA/S on 7 of the 12 factors compared between the two stocks.

DNB ASA/S Company Profile

DNB ASA provides various banking products and services for retail and corporate customers in Norway and internationally. It operates through Personal customers, Small and Medium-Sized Enterprises, Large Corporates and International Customers, Trading, and Traditional Pension Products segments. The company offers savings and investment products, including saving accounts, home savings products, equities, retirement savings, fixed rate deposits, exchange traded products, bonds and commercial papers, and asset management services; and loans, such as home mortgages, car and consumer loans, trade finance, and export financing, as well as overdraft facilities, bank guarantees, and leasing and factoring services. It also provides various cards; a range of insurance products comprising car, boat, motor vehicle, household contents, home, holiday home, travel, and life insurance products, as well as pet insurance for cats and dogs; and pension plans. In addition, the company offers investment banking advisory and financing services, such as mergers and acquisitions, and equity and debt capital markets for corporations and private equity firms; and foreign exchange and treasury, cash management, research, commodities, equities, corporate finance, interest rates, securities, real estate broking, and Internet and mobile banking services. It offers its products and services to various sectors, including energy; financial institutions; healthcare; manufacturing; packaging and forest products; seafood; shipping, offshore, and logistics; and telecom, media, and technology. The company distributes its products and services through its distribution network comprising branches, telephone banking, digital banking, and real estate broking, as well as external channels, such as post offices, and in-store postal and banking outlets. DNB ASA was founded in 1822 and is headquartered in Oslo, Norway.

National Bank of Canada Company Profile

National Bank of Canada provides various financial products and services to retail, commercial, corporate, and institutional clients in Canada and internationally. It operates through Personal and Commercial, Wealth Management, Financial Markets, and U.S. Specialty Finance and International segments. The Personal and Commercial segment offers personal banking services, including transaction solutions, mortgage loans and home equity lines of credit, consumer loans, payment solutions, savings options, and tailored investment solutions; various insurance products; and commercial banking services, such as credit, and deposit and investment solutions, as well as international trade, foreign exchange transactions, payroll, cash management, insurance, electronic transactions, and complementary services. The Wealth Management segment provides investment solutions, trust services, banking services, lending services, and other wealth management solutions through internal and third-party distribution networks. The Financial Markets segment offers debt and equity underwriting; bank credit and risk management products and services; advisory services in the areas of mergers and acquisitions, and financing; and investment banking services comprising origination, underwriting, distribution, and liquidity services through secondary market activities, as well as macroeconomic and issuer-focused research services. The U.S. Specialty Finance and International segments provides specialty finance expertise; financial products and services to individuals and businesses in Cambodia; and the activities of targeted investments in certain emerging markets. The company provides its services through a network of 429 branches and 931 banking machines. The company was founded in 1859 and is headquartered in Montreal, Canada.

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