UWM (NYSE:UWMC) versus Grupo Financiero Banorte SAB de CV (OTCMKTS:GBOOY) Critical Analysis

UWM (NYSE:UWMC) and Grupo Financiero Banorte SAB de CV (OTCMKTS:GBOOY) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, valuation, earnings, profitability, analyst recommendations, risk and institutional ownership.

Dividends

UWM pays an annual dividend of $0.40 per share and has a dividend yield of 36.5%. Grupo Financiero Banorte SAB de CV pays an annual dividend of $4.38 per share and has a dividend yield of 7.9%. UWM pays out -500.0% of its earnings in the form of a dividend. Grupo Financiero Banorte SAB de CV pays out 73.9% 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. UWM is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares UWM and Grupo Financiero Banorte SAB de CV’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
UWM	-1.04%	-6.20%	-0.50%
Grupo Financiero Banorte SAB de CV	14.97%	22.30%	2.20%

Valuation & Earnings

This table compares UWM and Grupo Financiero Banorte SAB de CV”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
UWM	$3.16 billion	0.56	$27.38 million	($0.08)	-13.69
Grupo Financiero Banorte SAB de CV	$21.89 billion	1.42	$3.38 billion	$5.93	9.35

Grupo Financiero Banorte SAB de CV has higher revenue and earnings than UWM. UWM is trading at a lower price-to-earnings ratio than Grupo Financiero Banorte SAB de CV, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and price targets for UWM and Grupo Financiero Banorte SAB de CV, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
UWM	2	8	4	0	2.14
Grupo Financiero Banorte SAB de CV	0	1	0	0	2.00

UWM currently has a consensus price target of $3.76, indicating a potential upside of 243.71%. Given UWM’s stronger consensus rating and higher possible upside, equities research analysts clearly believe UWM is more favorable than Grupo Financiero Banorte SAB de CV.

Volatility and Risk

UWM has a beta of 1.82, indicating that its share price is 82% more volatile than the S&P 500. Comparatively, Grupo Financiero Banorte SAB de CV has a beta of 0.71, indicating that its share price is 29% less volatile than the S&P 500.

Insider & Institutional Ownership

53.6% of UWM shares are owned by institutional investors. Comparatively, 0.0% of Grupo Financiero Banorte SAB de CV shares are owned by institutional investors. 80.9% of UWM shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

About UWM

UWM Holdings Corporation engages in the residential mortgage lending business in the United States. The company offers mortgage loans through wholesale channel. It originates primarily conforming and government loans. UWM Holdings Corporation was founded in 1986 and is headquartered in Pontiac, Michigan.

About Grupo Financiero Banorte SAB de CV

Grupo Financiero Banorte, S.A.B. de C.V., through its subsidiaries, engages in the provision of banking and financial products and services in Mexico and internationally. The company accepts checking, current, retirement, and payroll accounts; and provides loans, including mortgage, car, payroll, personal, structured, syndicated, SME loans, and credit cards, as well as letter of credit financing, acquisition funding, and import and export foreign trade financing. It is also involved in investment planning, foreign currency purchase/sale, financial advice, brokerage, asset management, investment banking, letters of credit, bank guarantees, and leasing and factoring activities. In addition, the company sells mutual funds and debt and capital instruments; issues debit cards; and provides insurance services for car, home, life, medical, employee, and SMEs, as well as cash management services for collection, trustees, payroll, and lines of credit. Further, it provides online banking, POS, payment, reconciliation, documentary collection, import bills of exchange discount, International wire transfer, remittances, storage, inventory management, logistics, marketing, and payroll services. The company was founded in 1899 and is based in Mexico City, Mexico.