Critical Survey: Credicorp (NYSE:BAP) and Intesa Sanpaolo (OTCMKTS:ISNPY)

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

Dividends

Intesa Sanpaolo pays an annual dividend of $1.91 per share and has a dividend yield of 4.4%. Credicorp pays an annual dividend of $14.48 per share and has a dividend yield of 3.7%. Intesa Sanpaolo pays out 51.3% of its earnings in the form of a dividend. Credicorp pays out 55.8% 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. Credicorp has increased its dividend for 3 consecutive years. Intesa Sanpaolo is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional & Insider Ownership

1.2% of Intesa Sanpaolo shares are owned by institutional investors. Comparatively, 89.8% of Credicorp shares are owned by institutional investors. 15.9% of Credicorp shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Risk and Volatility

Intesa Sanpaolo has a beta of 0.79, indicating that its share price is 21% less volatile than the S&P 500. Comparatively, Credicorp has a beta of 0.88, indicating that its share price is 12% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and price targets for Intesa Sanpaolo and Credicorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Intesa Sanpaolo	0	3	4	1	2.75
Credicorp	0	3	5	0	2.62

Credicorp has a consensus price target of $377.00, indicating a potential downside of 3.79%. Given Credicorp’s higher possible upside, analysts clearly believe Credicorp is more favorable than Intesa Sanpaolo.

Valuation & Earnings

This table compares Intesa Sanpaolo and Credicorp”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Intesa Sanpaolo	$43.96 billion	2.91	$10.54 billion	$3.72	11.66
Credicorp	$8.01 billion	4.62	$1.94 billion	$25.94	15.11

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

Profitability

This table compares Intesa Sanpaolo and Credicorp’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%
Credicorp	24.81%	20.61%	2.91%

Summary

Credicorp beats Intesa Sanpaolo on 11 of the 18 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 Credicorp

Credicorp Ltd. provides various financial, insurance, and health services and products primarily in Peru and internationally. It operates through Universal Banking, Insurance and Pensions, Microfinance, and Investment Banking and Equity Management segments. The Universal Banking segment grants various credits and financial instruments to individuals and legal entities; and various deposits and current accounts. The Insurance and Pensions segment issues insurance policies to cover losses in commercial property, transport, marine vessels, automobiles, life, health, and pensions; and management services for private pension funds. The Microfinance segment provides management of loans, deposits, and current accounts for small and microenterprises. The Investment Banking and Equity Management segment is involved in provision of brokerage and investment management services for corporations, institutional investors, governments, and foundations; structuring and placement of issues in the primary market; execution and negotiation of transactions in the secondary market; and structuring of securitization processes for corporate customers and manages mutual funds. The company was founded in 1889 and is headquartered in Lima, Peru.