Cambridge Bancorp (NASDAQ:CATC) and Itau Unibanco (NASDAQ:ITUB) Critical Comparison

Cambridge Bancorp (NASDAQ:CATC) and Itau Unibanco (NYSE:ITUB) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, risk, valuation, dividends and analyst recommendations.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Cambridge Bancorp and Itau Unibanco, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cambridge Bancorp 0 1 2 0 2.67
Itau Unibanco 1 4 2 0 2.14

Cambridge Bancorp currently has a consensus target price of $86.67, indicating a potential upside of 19.94%. Itau Unibanco has a consensus target price of $13.50, indicating a potential upside of 71.10%. Given Itau Unibanco’s higher probable upside, analysts clearly believe Itau Unibanco is more favorable than Cambridge Bancorp.

Volatility and Risk

Cambridge Bancorp has a beta of 0.12, meaning that its stock price is 88% less volatile than the S&P 500. Comparatively, Itau Unibanco has a beta of 0.78, meaning that its stock price is 22% less volatile than the S&P 500.

Profitability

This table compares Cambridge Bancorp and Itau Unibanco’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cambridge Bancorp 19.03% 13.32% 1.13%
Itau Unibanco 14.61% 18.63% 1.71%

Insider and Institutional Ownership

35.7% of Cambridge Bancorp shares are held by institutional investors. Comparatively, 5.3% of Itau Unibanco shares are held by institutional investors. 2.3% of Cambridge Bancorp shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

Cambridge Bancorp pays an annual dividend of $2.12 per share and has a dividend yield of 2.9%. Itau Unibanco pays an annual dividend of $0.04 per share and has a dividend yield of 0.5%. Cambridge Bancorp pays out 34.2% of its earnings in the form of a dividend. Itau Unibanco pays out 6.0% 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. Cambridge Bancorp has raised its dividend for 2 consecutive years and Itau Unibanco has raised its dividend for 3 consecutive years.

Earnings and Valuation

This table compares Cambridge Bancorp and Itau Unibanco’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cambridge Bancorp $132.74 million 2.95 $25.26 million $6.20 11.65
Itau Unibanco $46.96 billion 1.64 $6.81 billion $0.67 11.78

Itau Unibanco has higher revenue and earnings than Cambridge Bancorp. Cambridge Bancorp is trading at a lower price-to-earnings ratio than Itau Unibanco, indicating that it is currently the more affordable of the two stocks.

About Cambridge Bancorp

Cambridge Bancorp operates as the bank holding company for Cambridge Trust Company that provides commercial and consumer banking, and investment management and trust services. The company accepts various deposits, such as checking and savings accounts, certificates of deposit, money market accounts, individual retirement accounts, and time and demand deposits. Its loans products include residential and commercial real estate loans; home equity lines of credit and term loans; commercial and industrial loans; secured and unsecured loans, lines of credit, and personal installment loans; and construction loans. The company also offers cash management, online and mobile banking, and payments services. It serves commercial enterprises, non-profit organizations, and individuals. The company operates 10 Massachusetts locations in Cambridge, Boston, Belmont, Concord, Lexington, and Weston; and wealth management offices in Boston, Massachusetts, as well as in Concord, Manchester, and Portsmouth, New Hampshire. Cambridge Bancorp was founded in 1890 and is headquartered in Cambridge, Massachusetts.

About Itau Unibanco

Itaú Unibanco Holding S.A. provides a range of financial products and services to individuals and corporate clients in Brazil and internationally. The company operates in three segments: Retail Banking, Wholesale Banking, and Activities with the Market + Corporation. It accepts demand, savings, and time deposits; and offers payroll, mortgage, personal, vehicle, and corporate loans, as well as very small, small, and middle market loans. The company also provides credits cards; investment and private banking services; property, casualty, and life insurance products; reinsurance products; and private pension plans and premium bonds. In addition, it offers consumer finance credit; and capitalization, leasing, and brokerage services. As of December 31, 2017, the company operated through a network of 4,981 branches and client service branches, as well as 46,965 automated teller machines. The company was formerly known as Itaú Unibanco Banco Múltiplo S.A. and changed its name to Itaú Unibanco Holding S.A. in April 2009. Itaú Unibanco Holding S.A. was founded in 1945 and is headquartered in São Paulo, Brazil. Itaú Unibanco Holding S.A. operates as a subsidiary of IUPAR – Itaú Unibanco Participações S.A.

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