Head-To-Head Contrast: Credicorp (NYSE:BAP) vs. Danske Bank (OTCMKTS:DNKEY)

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

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Danske Bank and Credicorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Danske Bank	0	1	4	0	2.80
Credicorp	0	3	4	1	2.75

Credicorp has a consensus target price of $290.20, suggesting a potential downside of 11.04%. Given Credicorp’s higher probable upside, analysts clearly believe Credicorp is more favorable than Danske Bank.

Dividends

Danske Bank pays an annual dividend of $0.76 per share and has a dividend yield of 3.1%. Credicorp pays an annual dividend of $11.01 per share and has a dividend yield of 3.4%. Danske Bank pays out 37.6% of its earnings in the form of a dividend. Credicorp pays out 49.6% 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. 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.

Earnings & Valuation

This table compares Danske Bank and Credicorp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Danske Bank	$8.18 billion	5.03	$3.43 billion	$2.02	12.20
Credicorp	$7.00 billion	3.71	$1.47 billion	$22.19	14.70

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

Risk and Volatility

Danske Bank has a beta of 0.61, suggesting that its share price is 39% less volatile than the S&P 500. Comparatively, Credicorp has a beta of 0.89, suggesting that its share price is 11% less volatile than the S&P 500.

Insider and Institutional Ownership

89.8% of Credicorp shares are owned by institutional investors. 15.9% of Credicorp shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Danske Bank and Credicorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Danske Bank	40.42%	13.01%	0.61%
Credicorp	23.59%	19.50%	2.68%

Summary

Credicorp beats Danske Bank on 11 of the 17 factors compared between the two stocks.

About Danske Bank

Danske Bank A/S provides various banking products and services to corporate, institutional, and international clients. The company offers insurance and pension products, mortgage finance and real-estate brokerage services, asset management and trading services in fixed income products, foreign exchange services, and equities. It also provides advisory services to personal and private banking customers; and business advisory services, including acquisition, change of ownership, strategic development, or international expansion. In addition, the company offers financing, risk management, investment, and financial advisory services for large corporates and institutions; healthcare solutions; and online and mobile banking services. It has operations in Denmark, Finland, Sweden, Norway, the United Kingdom, and internationally. The company was founded in 1871 and is headquartered in Copenhagen, Denmark.

About Credicorp

Credicorp Ltd. provides various financial, insurance, and health services and products primarily in Peru and internationally. It operates through Universal Banking, Insurance and Pensions, Microfinance, and Investment Banking and Equity Management segments. The Universal Banking segment grants various credits and financial instruments to individuals and legal entities; and various deposits and current accounts. The Insurance and Pensions segment issues insurance policies to cover losses in commercial property, transport, marine vessels, automobiles, life, health, and pensions; and management services for private pension funds. The Microfinance segment provides management of loans, deposits, and current accounts for small and microenterprises. The Investment Banking and Equity Management segment is involved in provision of brokerage and investment management services for corporations, institutional investors, governments, and foundations; structuring and placement of issues in the primary market; execution and negotiation of transactions in the secondary market; and structuring of securitization processes for corporate customers and manages mutual funds. The company was founded in 1889 and is headquartered in Lima, Peru.