Head to Head Analysis: GRUPO AVAL ACCI/S (NYSE:AVAL) & Sumitomo Mitsui Financial Grp (NYSE:SMFG)

GRUPO AVAL ACCI/S (NYSE:AVAL) and Sumitomo Mitsui Financial Grp (NYSE:SMFG) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, dividends, earnings, risk, valuation, analyst recommendations and institutional ownership.

Profitability

This table compares GRUPO AVAL ACCI/S and Sumitomo Mitsui Financial Grp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
GRUPO AVAL ACCI/S 14.31% 13.47% 1.57%
Sumitomo Mitsui Financial Grp 13.06% 6.21% 0.34%

Institutional & Insider Ownership

5.6% of GRUPO AVAL ACCI/S shares are owned by institutional investors. Comparatively, 2.7% of Sumitomo Mitsui Financial Grp shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares GRUPO AVAL ACCI/S and Sumitomo Mitsui Financial Grp’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
GRUPO AVAL ACCI/S $6.97 billion 0.65 $910.35 million $0.80 5.10
Sumitomo Mitsui Financial Grp $51.74 billion 0.69 $4.98 billion $0.96 5.43

Sumitomo Mitsui Financial Grp has higher revenue and earnings than GRUPO AVAL ACCI/S. GRUPO AVAL ACCI/S is trading at a lower price-to-earnings ratio than Sumitomo Mitsui Financial Grp, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

GRUPO AVAL ACCI/S has a beta of 1.01, indicating that its stock price is 1% more volatile than the S&P 500. Comparatively, Sumitomo Mitsui Financial Grp has a beta of 1.14, indicating that its stock price is 14% more volatile than the S&P 500.

Dividends

GRUPO AVAL ACCI/S pays an annual dividend of $0.35 per share and has a dividend yield of 8.6%. Sumitomo Mitsui Financial Grp pays an annual dividend of $0.26 per share and has a dividend yield of 5.0%. GRUPO AVAL ACCI/S pays out 43.8% of its earnings in the form of a dividend. Sumitomo Mitsui Financial Grp pays out 27.1% 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. GRUPO AVAL ACCI/S has increased its dividend for 1 consecutive years and Sumitomo Mitsui Financial Grp has increased its dividend for 2 consecutive years.

Analyst Recommendations

This is a summary of current ratings and price targets for GRUPO AVAL ACCI/S and Sumitomo Mitsui Financial Grp, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
GRUPO AVAL ACCI/S 0 0 1 0 3.00
Sumitomo Mitsui Financial Grp 0 0 1 0 3.00

Summary

Sumitomo Mitsui Financial Grp beats GRUPO AVAL ACCI/S on 8 of the 13 factors compared between the two stocks.

GRUPO AVAL ACCI/S Company Profile

Grupo Aval Acciones y Valores S.A. provides a range of financial services and products to public and private sector customers in Colombia and Central America. The company's deposit products and services include checking accounts, savings accounts, and time deposits, as well as other deposits consisting of deposits from correspondent accounts, cashier checks, and collection services. It also provides loan products, such as commercial loans that comprise general purpose loans, working capital loans, loans funded by development banks, corporate credit cards, and overdraft loans; consumer loans comprising personal loans, automobile and other vehicle loans, credit cards, overdrafts, loans funded by development banks, and general purpose loans; microcredit loans; and mortgage loans. In addition, the company offers pension and severance fund management services; and trust, bonded warehousing and brokerage transactions, real estate escrow, merchandise and document storage and deposit, customs agency, cargo management, surety bond and merchandise distribution, bancassurance, and payment and collection services, as well as engages in deposit and lending operations in foreign currencies. Further, it is involved in merchant and investment banking activities; trading activities that include fixed income trading, and derivatives and foreign exchange operations, as well as the provision of treasury, pension plan administration, investment fund advice, financial advisory, leasing, private banking, and insurance services. As of December 31, 2017, the company operated through a network of 1,421 branches and 3,781 ATMs in Colombia; and 350 branches and 1,993 ATMs in Central America. Grupo Aval Acciones y Valores S.A. was founded in 1994 and is based in Bogotá, Colombia.

Sumitomo Mitsui Financial Grp Company Profile

Sumitomo Mitsui Financial Group, Inc., together with its subsidiaries, provides commercial banking, leasing, securities, consumer finance, and other services primarily in Japan. It operates through four segments: Wholesale Business, Retail Business, International Business, and Global Markets Business. The Wholesale Business segment provides financing, investment management, risk hedging and settlement services, as well as financial solutions for mergers and acquisition and other advisory services and leasing, primarily for large-and mid-sized corporate clients; and various leasing services, including equipment, and operating and leveraged leasing. The Retail Business segment offers wealth management, settlement services, consumer finance, and housing loans. The International Business segment provides loans, deposits, clearing services, trade finance, project finance, loan syndication, derivatives, and global cash management services; underwriting services; and leasing services related to the construction machinery, transportation equipment, industrial machinery, medical equipment, and aircraft leasing. As of March 31, 2018, this segment's network consisted of 18 branches, 22 sub-branches, and 4 representative offices. The Global Markets Business segment offers foreign exchange products, derivatives, bonds, stocks and other marketable financial products, and undertakes asset liability management operations. It also offers system development, data processing, management consulting, and economic research services; and investment advisory and investment trust management services. The company was founded in 2002 and is headquartered in Tokyo, Japan.

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