Critical Comparison: Banco de Chile (NYSE:BCH) and Swedbank AB (publ) (OTCMKTS:SWDBY)

Banco de Chile (NYSE:BCH) and Swedbank AB (publ) (OTCMKTS:SWDBY) are both large-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, analyst recommendations, institutional ownership, dividends, valuation and profitability.

Analyst Recommendations

This is a summary of current recommendations for Banco de Chile and Swedbank AB (publ), as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Banco de Chile 0 1 2 0 2.67
Swedbank AB (publ) 1 4 2 0 2.14

Banco de Chile presently has a consensus price target of $24.00, indicating a potential upside of 2.43%. Given Banco de Chile’s stronger consensus rating and higher probable upside, analysts clearly believe Banco de Chile is more favorable than Swedbank AB (publ).

Valuation & Earnings

This table compares Banco de Chile and Swedbank AB (publ)’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Banco de Chile $3.67 billion 3.23 $802.98 million $1.56 15.02
Swedbank AB (publ) $5.86 billion 3.51 $2.08 billion N/A N/A

Swedbank AB (publ) has higher revenue and earnings than Banco de Chile.

Volatility & Risk

Banco de Chile has a beta of 0.52, meaning that its share price is 48% less volatile than the S&P 500. Comparatively, Swedbank AB (publ) has a beta of 1.05, meaning that its share price is 5% more volatile than the S&P 500.

Profitability

This table compares Banco de Chile and Swedbank AB (publ)’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Banco de Chile 19.06% 13.35% 1.11%
Swedbank AB (publ) 24.33% 10.70% 0.58%

Insider and Institutional Ownership

0.1% of Swedbank AB (publ) shares are held by institutional investors. 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 de Chile pays an annual dividend of $0.38 per share and has a dividend yield of 1.6%. Swedbank AB (publ) pays an annual dividend of $0.25 per share and has a dividend yield of 1.4%. Banco de Chile pays out 24.4% of its earnings in the form of a dividend.

Summary

Swedbank AB (publ) beats Banco de Chile on 7 of the 13 factors compared between the two stocks.

Banco de Chile Company Profile

Banco de Chile SA engages in the provision of banking services. It operates through the following segments: Retail Banking; Wholesale Banking; Treasury and Money Market Operations; and Subsidiaries. The Retail Banking segment consists of consumer loans, commercial loans, checking accounts, credit cards, credit lines and mortgage loans. The Wholesale Banking segment includes corporate clients and large companies where the product offering focuses on commercial loans, checking accounts and liquidity management services, debt instruments, foreign trade, derivative contracts and leases. The Treasury and Money Market Operations segment comprises of the securities portfolio, derivatives positions, and currency trading. The Subsidiaries segment corresponds to companies and corporations controlled by the bank. The company was founded on October 28, 1893 and is headquartered in Santiago, Chile.

Swedbank AB (publ) Company Profile

Swedbank AB (publ) provides various banking products and services to private, corporate, and organizational customers. The company operates through Swedish Banking, Baltic Banking, and Large Corporates & Institutions segments. It offers savings, salary, and current accounts; private residential and corporate lending; leasing, factoring, and financing services; consumer, mortgage, acquisition and project, export, and marine financing; mutual funds; and asset management, and life insurance and pension services. The company also offers investment and trading services, including currency, fixed income, and equity derivatives and related derivatives services, as well as structured products; advisory and investment banking products and services, such as corporate financing, debt capital market, structured finance, and loans and syndication services; and transaction banking services, such as cash management, trade finance, securities, commercial payments, account, and clearing and settlement services. In addition, it provides domestic, international, mobile, document, and other payment products; debit and credit cards; real estate brokerage and management; legal services; and safe deposit boxes, as well as telephone, Internet, and mobile banking services. The company has 168 branches in Sweden, 26 branches in Estonia, 30 in Latvia, and 43 in Lithuania. It also operates in Norway, Finland, Denmark, Luxembourg, China, the United States, and South Africa. The company was formerly known as ForeningsSparbanken AB and changed its name to Swedbank AB (publ) in September 2006. Swedbank AB (publ) was founded in 1820 and is headquartered in Sundbyberg, Sweden.

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