Head-To-Head Comparison: National Bank of Canada (OTCMKTS:NTIOF) & Itau Unibanco (NYSE:ITUB)

Itau Unibanco (NYSE:ITUB) and National Bank of Canada (OTCMKTS:NTIOF) are both large-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, dividends, earnings, risk and institutional ownership.

Analyst Recommendations

This is a breakdown of current ratings for Itau Unibanco and National Bank of Canada, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Itau Unibanco	0	1	2	0	2.67
National Bank of Canada	0	5	3	0	2.38

Itau Unibanco presently has a consensus price target of $10.00, indicating a potential upside of 25.23%. Given Itau Unibanco’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Itau Unibanco is more favorable than National Bank of Canada.

Institutional and Insider Ownership

0.1% of National Bank of Canada shares are held by institutional investors. 0.6% of Itau Unibanco shares are held by company insiders. Comparatively, 0.3% of National Bank of Canada shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Itau Unibanco and National Bank of Canada”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Itau Unibanco	$30.04 billion	2.94	$8.03 billion	$0.76	10.51
National Bank of Canada	$21.96 billion	2.58	$2.87 billion	$8.63	17.16

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

Dividends

Itau Unibanco pays an annual dividend of $0.03 per share and has a dividend yield of 0.4%. National Bank of Canada pays an annual dividend of $3.83 per share and has a dividend yield of 2.6%. Itau Unibanco pays out 3.9% of its earnings in the form of a dividend. National Bank of Canada pays out 44.4% 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.

Risk & Volatility

Itau Unibanco has a beta of 0.56, indicating that its share price is 44% less volatile than the S&P 500. Comparatively, National Bank of Canada has a beta of 0.86, indicating that its share price is 14% less volatile than the S&P 500.

Profitability

This table compares Itau Unibanco and National Bank of Canada’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Itau Unibanco	26.41%	21.40%	1.53%
National Bank of Canada	17.22%	16.67%	0.85%

Summary

Itau Unibanco beats National Bank of Canada on 10 of the 16 factors compared between the two stocks.

About Itau Unibanco

Itaú Unibanco Holding S.A. offers a range of financial products and services to individuals and corporate customers in Brazil and internationally. The company operates through three segments: Retail Banking, Wholesale Banking, and Activities with the Market + Corporation. It offers current account; loans; credit and debit cards; investment and commercial banking services; real estate lending services; financing and investment services; economic, financial and brokerage advisory; and leasing and foreign exchange services. The company also provides property and casualty insurance products covering loss, damage, or liabilities for assets or persons, as well as life insurance products covering death and personal accident. It serves retail customers, account and non-account holders, individuals and legal entities, high income clients, microenterprises, and small companies, as well as middle-market companies and high net worth clients. The company was formerly known as Itaú Unibanco Banco Múltiplo S.A. and changed its name to Itaú Unibanco Holding S.A. in April 2009. The company was incorporated in 1924 and is headquartered in São Paulo, Brazil. Itaú Unibanco Holding S.A. operates as a subsidiary of IUPAR – Itaú Unibanco Participações S.A.

About National Bank of Canada

National Bank of Canada provides financial services to individuals, businesses, institutional clients, and governments in Canada and internationally. It operates through four segments: Personal and Commercial, Wealth Management, Financial Markets, and U.S. Specialty Finance and International. The Personal and Commercial segment offers personal banking services, including transaction solutions, mortgage loans and home equity lines of credit, consumer loans, payment solutions, and savings and investment solutions; various insurance products; and commercial banking services, such as credit, and deposit, investment solutions, international trade, foreign exchange transactions, payroll, cash management, insurance, electronic transactions, and complimentary services. The Wealth Management segment provides full-service brokerage, private banking, direct brokerage, investment solutions, administrative and trade execution, transaction products, and trust and estate services. The Financial Markets segment offers corporate banking, advisory, and capital markets services; and project financing, debt, and equity underwriting; advisory services in the areas of mergers and acquisitions, and financing. The U.S. Specialty Finance and International segment provides specialty finance products; and personal and commercial banking in Cambodia. National Bank of Canada was founded in 1859 and is headquartered in Montreal, Canada.