Critical Analysis: Banco Santander (SAN) & Its Competitors

Banco Santander (NYSE:SAN) is one of 85 public companies in the “BANKS – FOREIGN” industry, but how does it contrast to its competitors? We will compare Banco Santander to related businesses based on the strength of its risk, dividends, earnings, profitability, institutional ownership, valuation and analyst recommendations.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Banco Santander and its competitors, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Banco Santander	1	3	5	1	2.60
Banco Santander Competitors	1361	4478	4787	236	2.36

As a group, “BANKS – FOREIGN” companies have a potential upside of 7.56%. Given Banco Santander’s competitors higher possible upside, analysts plainly believe Banco Santander has less favorable growth aspects than its competitors.

Volatility and Risk

Banco Santander has a beta of 0.76, meaning that its stock price is 24% less volatile than the S&P 500. Comparatively, Banco Santander’s competitors have a beta of 0.67, meaning that their average stock price is 33% less volatile than the S&P 500.

Profitability

This table compares Banco Santander and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Banco Santander	18.85%	12.14%	0.73%
Banco Santander Competitors	18.36%	13.21%	1.06%

Institutional & Insider Ownership

9.2% of Banco Santander shares are owned by institutional investors. Comparatively, 25.4% of shares of all “BANKS – FOREIGN” companies are owned by institutional investors. 9.5% of Banco Santander shares are owned by company insiders. Comparatively, 4.9% of shares of all “BANKS – FOREIGN” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

Banco Santander pays an annual dividend of $0.19 per share and has a dividend yield of 1.6%. Banco Santander pays out 18.8% of its earnings in the form of a dividend. As a group, “BANKS – FOREIGN” companies pay a dividend yield of 3.4% and pay out 41.5% of their earnings in the form of a dividend.

Valuation and Earnings

This table compares Banco Santander and its competitors top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Banco Santander	$66.36 billion	$15.95 billion	11.80
Banco Santander Competitors	$39.66 billion	$7.26 billion	11.94

Banco Santander has higher revenue and earnings than its competitors. Banco Santander is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Summary

Banco Santander beats its competitors on 9 of the 15 factors compared.

Banco Santander Company Profile

Banco Santander, S.A. provides various financial services worldwide. The company operates through Retail Banking, Santander Corporate & Investment Banking, Wealth Management & Insurance, and PagoNxt segments. It offers demand and time deposits, mutual funds, and current and savings accounts; mortgages, consumer finance, loans, and various financing solutions; and project finance, debt capital markets, global transaction banking, and corporate finance services. The company also provides asset management and private banking services; and insurance products. In addition, it offers corporate and investment banking services; and digital payment solutions. Further, it offers online banking and financial services to retail, business, institutional, corporate, private banking and university customers and clients. The company was formerly known as Banco Santander Central Hispano SA and changed its name to Banco Santander, S.A. in February 2007. Banco Santander, S.A. was founded in 1856 and is headquartered in Madrid, Spain.