Comparing Banco Santander (SAN) and Banco Bilbao Vizcaya Argentaria (BBVA)

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Banco Santander (NYSE:SAN) and Banco Bilbao Vizcaya Argentaria (NYSE:BBVA) are both large-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their risk, valuation, analyst recommendations, institutional ownership, profitability, dividends and earnings.

Profitability

This table compares Banco Santander and Banco Bilbao Vizcaya Argentaria’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Banco Santander 16.13% 7.56% 0.55%
Banco Bilbao Vizcaya Argentaria 24.54% 7.66% 0.59%

Dividends

Banco Santander pays an annual dividend of $0.23 per share and has a dividend yield of 4.5%. Banco Bilbao Vizcaya Argentaria pays an annual dividend of $0.29 per share and has a dividend yield of 4.6%. Banco Santander pays out 41.8% of its earnings in the form of a dividend. Banco Bilbao Vizcaya Argentaria pays out 33.0% 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 has increased its dividend for 2 consecutive years and Banco Bilbao Vizcaya Argentaria has increased its dividend for 7 consecutive years. Banco Bilbao Vizcaya Argentaria is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Banco Santander has a beta of 1.08, indicating that its stock price is 8% more volatile than the S&P 500. Comparatively, Banco Bilbao Vizcaya Argentaria has a beta of 0.95, indicating that its stock price is 5% less volatile than the S&P 500.

Earnings and Valuation

This table compares Banco Santander and Banco Bilbao Vizcaya Argentaria’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Banco Santander $57.19 billion 1.44 $9.22 billion $0.55 9.35
Banco Bilbao Vizcaya Argentaria $20.46 billion 2.02 $6.29 billion $0.88 7.15

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

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Banco Santander and Banco Bilbao Vizcaya Argentaria, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Banco Santander 0 1 4 0 2.80
Banco Bilbao Vizcaya Argentaria 0 4 2 0 2.33

Banco Santander presently has a consensus price target of $6.00, suggesting a potential upside of 16.73%. Given Banco Santander’s stronger consensus rating and higher possible upside, research analysts plainly believe Banco Santander is more favorable than Banco Bilbao Vizcaya Argentaria.

Insider & Institutional Ownership

1.9% of Banco Santander shares are held by institutional investors. 9.5% of Banco Santander shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Banco Santander beats Banco Bilbao Vizcaya Argentaria on 9 of the 17 factors compared between the two stocks.

About Banco Santander

Banco Santander, S.A., together with its subsidiaries, provides various retail and commercial banking products and services for individual and corporate clients worldwide. It offers demand and time deposits, and current and savings accounts; certificates of deposit; mortgages, auto finance, and personal loans; working capital finance; and debit and credit cards, as well as life and non-life insurance products. The company also provides cash management, trade finance, custody and securities, and securitization services; corporate loans; capital market products; and syndicated corporate finance services. In addition, it is involved in the corporate banking, treasury, and investment banking activities; fixed income and equity derivatives; trading and hedging derivatives; and brokerage of equities. Further, the company offers asset management, private banking, and processing services, as well as mobile and online banking services. It operates through a network of 13,697 branches. The company was formerly known as Banco Santander Central Hispano S.A. and changed its name to Banco Santander, S.A. in June 2007. Banco Santander, S.A. was founded in 1856 and is headquartered in Madrid, Spain.

About Banco Bilbao Vizcaya Argentaria

Banco Bilbao Vizcaya Argentaria, S.A., together with its subsidiaries, provides retail and wholesale banking, asset management, and private banking services. The company accepts various deposits, such as current and savings accounts, term deposits, subordinated deposits, and other accounts. It also offers loan products; and foreclosed real-estate assets from residential mortgages and developers, as well as lending to developers. In addition, the company provides credit cards; and corporate and business banking, corporate and investment banking, and insurance. It operates in Spain, Mexico, South America, the United States, Turkey, Asia-Pacific, and rest of Europe. Banco Bilbao Vizcaya Argentaria, S.A. was founded in 1857 and is headquartered in Bilbao, Spain.

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