United Overseas Bank (OTCMKTS:UOVEY) and GRUPO AVAL ACCI/S (NYSE:AVAL) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, risk, profitability, analyst recommendations, valuation, earnings and dividends.

Insider and Institutional Ownership

0.4% of United Overseas Bank shares are held by institutional investors. Comparatively, 21.6% of GRUPO AVAL ACCI/S shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares United Overseas Bank and GRUPO AVAL ACCI/S’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
United Overseas Bank 32.33% 10.30% 1.04%
GRUPO AVAL ACCI/S 9.22% 8.56% 0.92%

Dividends

United Overseas Bank pays an annual dividend of $1.47 per share and has a dividend yield of 4.0%. GRUPO AVAL ACCI/S pays an annual dividend of $0.32 per share and has a dividend yield of 4.4%. United Overseas Bank pays out 51.2% of its earnings in the form of a dividend. GRUPO AVAL ACCI/S pays out 53.3% 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.

Volatility and Risk

United Overseas Bank has a beta of 1.09, suggesting that its stock price is 9% more volatile than the S&P 500. Comparatively, GRUPO AVAL ACCI/S has a beta of 0.55, suggesting that its stock price is 45% less volatile than the S&P 500.

Valuation & Earnings

This table compares United Overseas Bank and GRUPO AVAL ACCI/S’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
United Overseas Bank $8.99 billion 3.38 $2.46 billion $2.87 12.72
GRUPO AVAL ACCI/S $7.02 billion 0.36 $657.60 million $0.60 12.08

United Overseas Bank has higher revenue and earnings than GRUPO AVAL ACCI/S. GRUPO AVAL ACCI/S is trading at a lower price-to-earnings ratio than United Overseas Bank, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings and target prices for United Overseas Bank and GRUPO AVAL ACCI/S, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
United Overseas Bank 0 0 0 0 N/A
GRUPO AVAL ACCI/S 0 2 0 0 2.00

GRUPO AVAL ACCI/S has a consensus target price of $9.00, suggesting a potential upside of 24.14%. Given GRUPO AVAL ACCI/S’s higher possible upside, analysts plainly believe GRUPO AVAL ACCI/S is more favorable than United Overseas Bank.

Summary

United Overseas Bank beats GRUPO AVAL ACCI/S on 10 of the 13 factors compared between the two stocks.

United Overseas Bank Company Profile

United Overseas Bank Limited provides financial products and services. The company's Group Retail segment provides deposits, insurance, card, wealth management, investment, and loan and trade financing products for personal and small enterprise customers. Its Group Wholesale Banking segment provides financing, trade, cash management, capital markets solutions, and advisory and treasury products and services. The company's Global Markets segment offers foreign exchange, interest rate, credit, commodities, equities, and structured investment products; and manages funds and liquidity. Its Other segment provides investment management, property, and insurance services. The company has a network of approximately 500 offices in 19 countries and territories in the Asia Pacific, Europe, and North America. The company was formerly known as United Chinese Bank and changed its name to United Overseas Bank Limited in 1965. United Overseas Bank Limited was founded in 1935 and is headquartered in Singapore.

GRUPO AVAL ACCI/S Company Profile

Grupo Aval Acciones y Valores S.A. provides a range of financial services and products to public and private sector customers in Colombia and Central America. The company's deposit products and services include checking accounts, savings accounts, and time deposits, as well as other deposits consisting of deposits from correspondent accounts, cashier checks, and collection services. It also provides loan products, such as commercial loans that comprise general purpose loans, working capital loans, loans funded by development banks, corporate credit cards, and overdraft loans; consumer loans comprising personal loans, automobile and other vehicle loans, credit cards, overdrafts, loans funded by development banks, and general purpose loans; microcredit loans; and mortgage loans. In addition, the company offers pension and severance fund management services; and trust, bonded warehousing and brokerage transactions, real estate escrow, merchandise and document storage and deposit, customs agency, cargo management, surety bond and merchandise distribution, bancassurance, and payment and collection services, as well as engages in deposit and lending operations in foreign currencies. Further, it is involved in merchant and investment banking activities; trading activities that include fixed income trading, and derivatives and foreign exchange operations, as well as the provision of treasury, pension plan administration, investment fund advice, financial advisory, leasing, private banking, and insurance services. As of December 31, 2017, the company operated through a network of 1,421 branches and 3,781 ATMs in Colombia; and 350 branches and 1,993 ATMs in Central America. Grupo Aval Acciones y Valores S.A. was founded in 1994 and is based in Bogotá, Colombia.

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