Financial Review: Commonwealth Bank of Australia (OTCMKTS:CMWAY) vs. UBS Group (NYSE:UBS)

UBS Group (NYSE:UBS) and Commonwealth Bank of Australia (OTCMKTS:CMWAY) are both large-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, valuation, dividends, profitability, analyst recommendations, institutional ownership and risk.

Profitability

This table compares UBS Group and Commonwealth Bank of Australia’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
UBS Group	10.88%	8.68%	0.48%
Commonwealth Bank of Australia	N/A	N/A	N/A

Insider & Institutional Ownership

0.0% of Commonwealth Bank of Australia shares are owned by institutional investors. 1.0% of UBS Group shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares UBS Group and Commonwealth Bank of Australia”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
UBS Group	$76.12 billion	1.72	$7.77 billion	$2.36	17.79
Commonwealth Bank of Australia	$61.51 billion	3.42	$6.55 billion	N/A	N/A

UBS Group has higher revenue and earnings than Commonwealth Bank of Australia.

Risk and Volatility

UBS Group has a beta of 1.12, meaning that its share price is 12% more volatile than the S&P 500. Comparatively, Commonwealth Bank of Australia has a beta of 1.3, meaning that its share price is 30% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings for UBS Group and Commonwealth Bank of Australia, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
UBS Group	1	5	5	1	2.50
Commonwealth Bank of Australia	1	0	0	1	2.50

UBS Group presently has a consensus price target of $60.30, suggesting a potential upside of 43.66%. Commonwealth Bank of Australia has a consensus price target of $130.18, suggesting a potential upside of 3.70%. Given UBS Group’s higher probable upside, equities analysts clearly believe UBS Group is more favorable than Commonwealth Bank of Australia.

Summary

UBS Group beats Commonwealth Bank of Australia on 8 of the 11 factors compared between the two stocks.

About UBS Group

UBS Group AG provides financial advice and solutions to private, institutional, and corporate clients worldwide. It operates through five divisions: Global Wealth Management, Personal & Corporate Banking, Asset Management, Investment Bank, and Non-core and Legacy. The company offers investment advice, estate and wealth planning, investing, corporate and banking, and investment management, as well as mortgage, securities-based, and structured lending solutions. It also provides personal banking products and services, such as deposits, credit and debit cards, and online and mobile banking, as well as lending, investments, retirement, and wealth management services; and corporate and institutional solutions, including equity and debt capital markets, syndicated and structured credit, private placements, leasing, traditional financing, and transaction banking solutions for payment and cash management services, trade and export finance, and global custody solutions. In addition, the company offers equities, fixed income, hedge funds, real estate and private markets, indexed and alternative beta strategies, asset allocation and currency investment strategies, customized multi-asset solutions, advisory and fiduciary services, and multi-manager hedge fund solutions and advisory services. Further, it advises clients on strategic business opportunities and helps them raise capital to fund their activities; enables its clients to buy, sell, and finance securities on capital markets and to manage their risks and liquidity; distributes, trades in, finances, and clears cash equities and equity-linked products; structures, originates, and distributes new equity and equity-linked issues; and originates, distributes, manages risk, and provides liquidity in foreign exchange, rates, credit and precious metals. The company was formerly known as UBS AG and changed its name to UBS Group AG in December 2014. UBS Group AG was founded in 1862 and is headquartered in Zurich, Switzerland.

About Commonwealth Bank of Australia

Commonwealth Bank of Australia provides financial services in Australia, New Zealand, and internationally. It operates through Retail Banking Services, Business Banking, Institutional Banking and Markets, and New Zealand segments. The company offers transaction, savings, and foreign currency accounts; term deposits; personal and business loans; overdrafts; equipment finance; credit cards; international payment and trade; and private banking services, as well as home and car loans. It also provides institutional banking services; funds management, superannuation, and share broking products and services; home, car, health, life, income protection, and travel insurance products, as well as retail, premium, business, offshore services. In addition, the company offers advisory services for high-net-worth individuals; equities trading and margin lending services; debt capital, transaction banking, working capital, and risk management services; and international and foreign exchange services. Commonwealth Bank of Australia was founded in 1911 and is based in Sydney, Australia.