Critical Survey: Intesa Sanpaolo (OTCMKTS:ISNPY) and 1st Source (NASDAQ:SRCE)

Intesa Sanpaolo (OTCMKTS:ISNPY) and 1st Source (NASDAQ:SRCE) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, earnings, analyst recommendations, profitability, institutional ownership and risk.

Dividends

Intesa Sanpaolo pays an annual dividend of $1.91 per share and has a dividend yield of 4.1%. 1st Source pays an annual dividend of $1.80 per share and has a dividend yield of 2.1%. Intesa Sanpaolo pays out 51.3% of its earnings in the form of a dividend. 1st Source pays out 27.6% 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. 1st Source has raised its dividend for 38 consecutive years.

Earnings & Valuation

This table compares Intesa Sanpaolo and 1st Source”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Intesa Sanpaolo	$43.96 billion	3.13	$10.54 billion	$3.72	12.54
1st Source	$600.00 million	3.47	$158.28 million	$6.52	13.27

Intesa Sanpaolo has higher revenue and earnings than 1st Source. Intesa Sanpaolo is trading at a lower price-to-earnings ratio than 1st Source, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

1.2% of Intesa Sanpaolo shares are owned by institutional investors. Comparatively, 74.5% of 1st Source shares are owned by institutional investors. 20.2% of 1st Source shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Volatility and Risk

Intesa Sanpaolo has a beta of 0.79, indicating that its share price is 21% less volatile than the S&P 500. Comparatively, 1st Source has a beta of 0.56, indicating that its share price is 44% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Intesa Sanpaolo and 1st Source, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Intesa Sanpaolo	0	3	4	1	2.75
1st Source	0	2	2	1	2.80

1st Source has a consensus price target of $89.67, suggesting a potential upside of 3.67%. Given 1st Source’s stronger consensus rating and higher probable upside, analysts clearly believe 1st Source is more favorable than Intesa Sanpaolo.

Profitability

This table compares Intesa Sanpaolo and 1st Source’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Intesa Sanpaolo	25.19%	14.10%	1.02%
1st Source	28.09%	12.94%	1.87%

Summary

1st Source beats Intesa Sanpaolo on 11 of the 17 factors compared between the two stocks.

About Intesa Sanpaolo

Intesa Sanpaolo S.p.A. provides various financial products and services primarily in Italy. It operates through six segments: Banca dei Territori, IMI Corporate & Investment Banking, International Subsidiary Banks, Asset Management, Private Banking, and Insurance. The company offers lending and deposit products; private and commercial banking, corporate and transaction banking, structured finance, investment banking, public finance, and capital markets; industrial credit, leasing, and factoring; asset management; life and non-life insurance and pension products; asset and wealth management; private investments; and bancassurance products. The company serves individuals, small and medium-sized businesses, non-profit customers, corporates and financial institutions, public administration, private clients and high net worth individuals, institutional clientele, and other customers. Intesa Sanpaolo S.p.A. was founded in 1998 and is headquartered in Turin, Italy.

About 1st Source

1st Source Corporation operates as the bank holding company for 1st Source Bank that provides commercial and consumer banking services, trust and wealth advisory services, and insurance products to individual and business clients. Its consumer banking services include checking and savings accounts; certificates of deposit; individual retirement accounts; online and mobile banking products; consumer loans, real estate mortgage loans, and home equity lines of credit; and financial planning, financial literacy, and other consultative services, as well as debit and credit cards. The company also offers commercial, small business, agricultural, and real estate loans for general corporate purposes, including financing for industrial and commercial properties, equipment, inventories, accounts receivables, and renewable energy and acquisition financing; and commercial leasing, treasury management, and retirement planning services. In addition, it provides trust, investment, agency, and custodial services comprising administration of estates and personal trusts, as well as management of investment accounts for individuals, employee benefit plans, and charitable foundations. Further, the company offers equipment loan and lease products for construction equipment, new and pre-owned aircraft, auto and light trucks, and medium and heavy duty trucks; and finances construction equipment, aircrafts, medium and heavy duty trucks, step vans, vocational work trucks, motor coaches, shuttle buses, funeral cars, automobiles, and other equipment. Additionally, it provides corporate and personal property, casualty, and individual and group health and life insurance products and services. 1st Source Corporation was founded in 1863 and is headquartered in South Bend, Indiana.