Reviewing Banco Santander Brasil (BSBR) & SunTrust Banks (STI)

Banco Santander Brasil (NYSE: BSBR) and SunTrust Banks (NYSE:STI) are both large-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, profitability, valuation, analyst recommendations, institutional ownership, earnings and risk.

Profitability

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This table compares Banco Santander Brasil and SunTrust Banks’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Banco Santander Brasil 10.46% 10.08% 1.40%
SunTrust Banks 23.35% 9.18% 1.00%

Institutional & Insider Ownership

1.7% of Banco Santander Brasil shares are held by institutional investors. Comparatively, 83.6% of SunTrust Banks shares are held by institutional investors. 0.5% of SunTrust Banks shares are held by 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.

Dividends

Banco Santander Brasil pays an annual dividend of $0.11 per share and has a dividend yield of 1.0%. SunTrust Banks pays an annual dividend of $1.60 per share and has a dividend yield of 2.3%. Banco Santander Brasil pays out 20.0% of its earnings in the form of a dividend. SunTrust Banks pays out 35.7% 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. Banco Santander Brasil has increased its dividend for 5 consecutive years.

Volatility & Risk

Banco Santander Brasil has a beta of 1.59, meaning that its stock price is 59% more volatile than the S&P 500. Comparatively, SunTrust Banks has a beta of 1.33, meaning that its stock price is 33% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations for Banco Santander Brasil and SunTrust Banks, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Banco Santander Brasil 1 3 2 0 2.17
SunTrust Banks 0 14 9 0 2.39

Banco Santander Brasil currently has a consensus price target of $15.67, suggesting a potential upside of 38.15%. SunTrust Banks has a consensus price target of $68.93, suggesting a potential downside of 2.47%. Given Banco Santander Brasil’s higher probable upside, research analysts plainly believe Banco Santander Brasil is more favorable than SunTrust Banks.

Valuation and Earnings

This table compares Banco Santander Brasil and SunTrust Banks’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Banco Santander Brasil $26.68 billion 1.59 $2.80 billion $0.55 20.62
SunTrust Banks $9.74 billion 3.40 $2.27 billion $4.48 15.77

Banco Santander Brasil has higher revenue and earnings than SunTrust Banks. SunTrust Banks is trading at a lower price-to-earnings ratio than Banco Santander Brasil, indicating that it is currently the more affordable of the two stocks.

Summary

Banco Santander Brasil beats SunTrust Banks on 9 of the 17 factors compared between the two stocks.

Banco Santander Brasil Company Profile

Banco Santander (Brasil) S.A. (the Bank) is indirectly controlled by Banco Santander, S.A., and is an institution of the Financial and Prudential Group. The Bank operates through two segments, Commercial Banking and Global Wholesale Banking. The Company conducts its operations by means of portfolios such as commercial, investment, lending and financing, mortgage lending, leasing, credit card operations and foreign exchange. The Bank also operates in the payment institution, leasing, buying club management and securities, insurance brokerage operations, capitalization and pension plan. Through Global Wholesale Banking segment, the Bank offers financial services and structured solutions to its customers, in parallel with its trading activities. It also offers foreign exchange products, over the counter derivatives and investments to all of its clients, including institutional investors, corporate clients and individuals.

SunTrust Banks Company Profile

SunTrust Banks, Inc. is a provider of financial services. The Company’s principal subsidiary is SunTrust Bank (the Bank). The Company’s business segments include Consumer Banking and Private Wealth Management, Wholesale Banking, Mortgage Banking and Corporate Other. As of December 31, 2016, the Consumer Banking and Private Wealth Management segment consisted of three primary businesses: Consumer Banking, Consumer Lending and Private Wealth Management. The Wholesale Banking segment includes the operations of the Corporate and investment banking (CIB), Commercial and Business Banking, Commercial Real Estate, and Treasury and Payment Solutions businesses. The Mortgage Banking segment offers residential mortgage products nationally through its retail and correspondent channels, the Internet (www.suntrust.com) and by telephone. The Bank provides clients with a selection of full-, self- and assisted-service channels, including branch, call center, Teller Connect machines, mobile and tablet.

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