Head to Head Analysis: DNB Bank ASA (OTCMKTS:DNBBY) & NU (NYSE:NU)

DNB Bank ASA (OTCMKTS:DNBBY) and NU (NYSE:NU) are both large-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their profitability, risk, institutional ownership, earnings, valuation, dividends and analyst recommendations.

Profitability

This table compares DNB Bank ASA and NU’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
DNB Bank ASA	21.34%	14.02%	1.09%
NU	18.20%	30.91%	4.80%

Dividends

DNB Bank ASA pays an annual dividend of $1.41 per share and has a dividend yield of 4.6%. NU pays an annual dividend of $1.67 per share and has a dividend yield of 11.6%. DNB Bank ASA pays out 50.4% of its earnings in the form of a dividend. NU pays out 256.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Institutional & Insider Ownership

84.0% of NU shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and target prices for DNB Bank ASA and NU, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DNB Bank ASA	2	3	2	0	2.00
NU	1	4	10	0	2.60

NU has a consensus price target of $17.24, indicating a potential upside of 19.86%. Given NU’s stronger consensus rating and higher probable upside, analysts plainly believe NU is more favorable than DNB Bank ASA.

Valuation & Earnings

This table compares DNB Bank ASA and NU”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DNB Bank ASA	$19.14 billion	2.49	$4.20 billion	$2.80	10.96
NU	$11.91 billion	5.86	$2.87 billion	$0.65	22.13

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

Risk & Volatility

DNB Bank ASA has a beta of 0.64, suggesting that its share price is 36% less volatile than the S&P 500. Comparatively, NU has a beta of 0.95, suggesting that its share price is 5% less volatile than the S&P 500.

Summary

NU beats DNB Bank ASA on 10 of the 15 factors compared between the two stocks.

About DNB Bank ASA

DNB Bank ASA provides financial services for individual and business customers in Norway and internationally. The company offers savings, current, and pension accounts; fixed rate and security deposits; home and cabin mortgages, car and consumer loans, business loans, and refinancing; car, house, home contents, travel, personal, and non-life insurance product; payment services; and online and mobile banking services, as well as cards. It also provides overdraft facilities; leasing services; factoring, supply chain, and receivable purchase financing services; bank guarantee, secure trading, documentary collection, and letter of credit services; investment banking services, such as mergers and acquisition, equity and debt capital market, shares and securities, mutual funds and trading, and bonds and commodities; and private financing, as well as equity trading, foreign exchange, interest rates, and risk advisory services. In addition, the company offers treasury management, working capital, trade finance, auto lease and equipment financing, and corporate finance services, as well as act as an estate agents. DNB Bank ASA was founded in 1822 and is headquartered in Oslo, Norway.

About NU

Nu Holdings Ltd. is a holding company, which engages in the provision of digital banking services. The company was founded by David Vélez Osorno, Cristina Helena Zingaretti Junqueira, and Adam Edward Wible on February 26, 2016 and is headquartered in George Town, Cayman Islands.