Critical Analysis: Banco Santander Brasil (NYSE:BSBR) vs. Intesa Sanpaolo (OTCMKTS:ISNPY)

Banco Santander Brasil (NYSE:BSBR) and Intesa Sanpaolo (OTCMKTS:ISNPY) are both large-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, earnings, valuation, analyst recommendations, institutional ownership, profitability and dividends.

Volatility & Risk

Banco Santander Brasil has a beta of 0.58, indicating that its share price is 42% less volatile than the S&P 500. Comparatively, Intesa Sanpaolo has a beta of 0.8, indicating that its share price is 20% less volatile than the S&P 500.

Profitability

This table compares Banco Santander Brasil and Intesa Sanpaolo’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Banco Santander Brasil	7.06%	10.49%	1.04%
Intesa Sanpaolo	23.71%	13.48%	0.98%

Dividends

Banco Santander Brasil pays an annual dividend of $0.29 per share and has a dividend yield of 5.3%. Intesa Sanpaolo pays an annual dividend of $1.87 per share and has a dividend yield of 4.6%. Intesa Sanpaolo pays out 52.7% of its earnings in the form of a dividend.

Analyst Ratings

This is a summary of current recommendations and price targets for Banco Santander Brasil and Intesa Sanpaolo, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Banco Santander Brasil	1	1	1	0	2.00
Intesa Sanpaolo	0	3	4	1	2.75

Valuation & Earnings

This table compares Banco Santander Brasil and Intesa Sanpaolo”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Banco Santander Brasil	$42.52 billion	0.48	$2.29 billion	N/A	N/A
Intesa Sanpaolo	$43.96 billion	2.68	$10.54 billion	$3.55	11.42

Intesa Sanpaolo has higher revenue and earnings than Banco Santander Brasil.

Institutional & Insider Ownership

14.5% of Banco Santander Brasil shares are held by institutional investors. Comparatively, 1.2% of Intesa Sanpaolo shares are held by institutional investors. 0.1% of Banco Santander Brasil shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Intesa Sanpaolo beats Banco Santander Brasil on 9 of the 14 factors compared between the two stocks.

About Banco Santander Brasil

Banco Santander (Brasil) S.A., together with its subsidiaries, provides various banking products and services to individuals, small and medium enterprises, and corporate customers in Brazil and internationally. The company operates through Commercial Banking and Global Wholesale Banking segments. It offers local loans, commercial financing options, development bank funds, and cash management services; export and import financing, guarantees, structuring of asset services. In addition, the company provides financing and advisory services for infrastructure projects and capital markets instruments, as well as offers equity transactions and mergers and acquisitions services. Further, it offers foreign exchange products, derivatives, and investments to institutional investors, corporate clients, and individuals. Additionally, the company provides research services, as well as offers brokerage services for corporate, institutional, and individual investors. Furthermore, it provides deposits and other bank funding instruments, and debit and credit cards. The company provides financial services and products to its customers through multichannel distribution network comprising branches, mini-branches, ATMs, call centers, Internet banking, and mobile banking. Banco Santander (Brasil) S.A. was incorporated in 1985 and is headquartered in São Paulo, Brazil. The company operates as a subsidiary of Banco Santander, S.A.

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.