Critical Review: Eastern Virginia Bankshares (NASDAQ:EVBS) and Banco Santander Chile (BSAC)

Banco Santander Chile (NYSE: BSAC) and Eastern Virginia Bankshares (NASDAQ:EVBS) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, earnings, dividends, risk, profitability, analyst recommendations and institutional ownership.

Analyst Ratings

This is a breakdown of current ratings and price targets for Banco Santander Chile and Eastern Virginia Bankshares, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Banco Santander Chile 0 4 0 0 2.00
Eastern Virginia Bankshares 0 1 0 0 2.00

Banco Santander Chile presently has a consensus target price of $26.00, indicating a potential downside of 2.88%. Eastern Virginia Bankshares has a consensus target price of $11.00, indicating a potential downside of 0.09%. Given Eastern Virginia Bankshares’ higher probable upside, analysts plainly believe Eastern Virginia Bankshares is more favorable than Banco Santander Chile.

Profitability

This table compares Banco Santander Chile and Eastern Virginia Bankshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Banco Santander Chile 19.92% 17.51% 1.45%
Eastern Virginia Bankshares 13.18% 4.20% 0.50%

Insider and Institutional Ownership

21.8% of Banco Santander Chile shares are held by institutional investors. Comparatively, 44.2% of Eastern Virginia Bankshares shares are held by institutional investors. 4.8% of Eastern Virginia Bankshares shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Dividends

Banco Santander Chile pays an annual dividend of $0.85 per share and has a dividend yield of 3.2%. Eastern Virginia Bankshares pays an annual dividend of $0.12 per share and has a dividend yield of 1.1%. Banco Santander Chile pays out 48.6% of its earnings in the form of a dividend. Eastern Virginia Bankshares pays out 38.7% 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.

Valuation and Earnings

This table compares Banco Santander Chile and Eastern Virginia Bankshares’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Banco Santander Chile $3.83 billion 3.29 $618.88 million $1.75 15.30
Eastern Virginia Bankshares N/A N/A N/A $0.31 35.52

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

Summary

Banco Santander Chile beats Eastern Virginia Bankshares on 6 of the 10 factors compared between the two stocks.

Banco Santander Chile Company Profile

Banco Santander-Chile (the Bank), formerly Banco Santander Chile, is a Chilean bank. The Bank’s segments include Retail banking, Middle-market, Global Corporate Banking and Corporate Activities (Other). The Retail Banking segment consists of individuals and small to middle-sized entities (SMEs). The Middle-market segment serves companies and large corporations. The Global Corporate Banking segment consists of foreign and domestic multinational companies. The Corporate Activities segment includes its Financial Management Division, which develops global management functions. It provides a range of commercial and retail banking services to its customers, including Chilean peso and foreign currency denominated loans to finance a range of commercial transactions, trade, foreign currency forward contracts and credit lines and a range of retail banking services, including mortgage financing. In addition to its traditional banking operations, the Bank offers a range of financial services.

Eastern Virginia Bankshares Company Profile

Eastern Virginia Bankshares, Inc. is a bank holding company. The Company operates through its bank subsidiary, EVB (the Bank). EVB is a community bank focusing on small to medium-sized businesses and consumers in its coastal plain markets and the emerging suburbs outside of the Richmond, Tidewater, and southern Virginia areas. The Company provides general commercial financial services to customers located in the geographic areas of its retail branch network. It provides a range of personal and commercial banking services, including commercial, consumer and real estate loans. Its investment securities include agency residential mortgage-backed securities, agency commercial mortgage-backed securities, and state and political subdivisions. The Company offers a range of retail and commercial deposit products and fee-based services. Its deposits include demand deposits, savings and money market accounts, and time deposits.

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