Head-To-Head Contrast: BlackRock (BLK) and Credit Suisse Group (CS)

BlackRock (NYSE: BLK) and Credit Suisse Group (NYSE:CS) are both large-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, valuation, dividends, risk, profitability, analyst recommendations and institutional ownership.

Dividends

BlackRock pays an annual dividend of $11.52 per share and has a dividend yield of 2.4%. Credit Suisse Group pays an annual dividend of $0.25 per share and has a dividend yield of 1.6%. BlackRock pays out 51.0% of its earnings in the form of a dividend. Credit Suisse Group pays out 46.3% 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. BlackRock has increased its dividend for 8 consecutive years. BlackRock is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

83.9% of BlackRock shares are owned by institutional investors. Comparatively, 3.2% of Credit Suisse Group shares are owned by institutional investors. 1.9% of BlackRock shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares BlackRock and Credit Suisse Group’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
BlackRock $12.49 billion 6.14 $4.97 billion $22.60 21.19
Credit Suisse Group $31.90 billion 1.22 -$999.02 million $0.54 28.28

BlackRock has higher earnings, but lower revenue than Credit Suisse Group. BlackRock is trading at a lower price-to-earnings ratio than Credit Suisse Group, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent recommendations and price targets for BlackRock and Credit Suisse Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BlackRock 0 2 9 0 2.82
Credit Suisse Group 1 1 9 0 2.73

BlackRock currently has a consensus price target of $597.27, indicating a potential upside of 24.70%. Given BlackRock’s stronger consensus rating and higher possible upside, equities analysts clearly believe BlackRock is more favorable than Credit Suisse Group.

Risk & Volatility

BlackRock has a beta of 1.61, meaning that its stock price is 61% more volatile than the S&P 500. Comparatively, Credit Suisse Group has a beta of 1.34, meaning that its stock price is 34% more volatile than the S&P 500.

Profitability

This table compares BlackRock and Credit Suisse Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
BlackRock 38.97% 13.20% 1.95%
Credit Suisse Group -1.51% 4.31% 0.23%

Summary

BlackRock beats Credit Suisse Group on 13 of the 16 factors compared between the two stocks.

BlackRock Company Profile

BlackRock, Inc. is a publicly owned investment manager. The firm primarily provides its services to institutional, intermediary, and individual investors including corporate, public, union, and industry pension plans, insurance companies, third-party mutual funds, endowments, public institutions, governments, foundations, charities, sovereign wealth funds, corporations, official institutions, and banks. It also provides global risk management and advisory services. The firm manages separate client-focused equity, fixed income, and balanced portfolios. It also launches and manages open-end and closed-end mutual funds, offshore funds, unit trusts, and alternative investment vehicles including structured funds. The firm launches equity, fixed income, balanced, and real estate mutual funds. It also launches equity, fixed income, balanced, currency, commodity, and multi-asset exchange traded funds. The firm also launches and manages hedge funds. It invests in the public equity, fixed income, real estate, currency, commodity, and alternative markets across the globe. The firm primarily invests in growth and value stocks of small-cap, mid-cap, SMID-cap, large-cap, and multi-cap companies. It also invests in dividend-paying equity securities. The firm invests in investment grade municipal securities, government securities including securities issued or guaranteed by a government or a government agency or instrumentality, corporate bonds, and asset-backed and mortgage-backed securities. It employs fundamental and quantitative analysis with a focus on bottom-up and top-down approach to make its investments. The firm employs liquidity, asset allocation, balanced, real estate, and alternative strategies to make its investments. In real estate sector, it seeks to invest in Poland and Germany. The firm benchmarks the performance of its portfolios against various S&P, Russell, Barclays, MSCI, Citigroup, and Merrill Lynch indices. BlackRock, Inc. was founded in 1988 and is based in New York City with additional offices in Boston, Massachusetts; London, United Kingdom; Gurgaon, India; Hong Kong; Greenwich, Connecticut; Princeton, New Jersey; Edinburgh, United Kingdom; Sydney, Australia; Taipei, Taiwan; Singapore; Sao Paulo, Brazil; Philadelphia, Pennsylvania; Washington, District of Columbia; Toronto, Canada; Wilmington, Delaware; and San Francisco, California.

Credit Suisse Group Company Profile

Credit Suisse Group AG, together with its subsidiaries, provides various financial services worldwide. It operates through six segments: Swiss Universal Bank, International Wealth Management, Asia Pacific, Global Markets, Investment Banking & Capital Markets, and Strategic Resolution Unit. The company offers private banking and wealth management solutions, including advisory, investment, financial planning, succession planning, and trust services; and financing and lending, and multi-shore platform solutions. It also provides traditional and structured lending, payment, foreign exchange, capital goods leasing, merger and acquisition, syndication, structured finance, commodity trade finance, trade finance, structured trade finance, export finance, factoring, fund management and administration, fund design, custody, ship and aviation, securities, cash, and treasury services. In addition, the company offers asset management products; equity and debt underwriting, and advisory services; cash equities, equity derivatives, and convertibles, as well as other services; fixed income products, such as credit, securitized, macro, emerging markets, financing, structured credit, and other products. Further, it provides HOLT, a framework for assessing the performance of approximately 20,000 companies; and equity and fixed income research services. As of December 31, 2017 the company had 378 offices and branches. It serves private, corporate, and institutional clients; ultra-high-net-worth individuals, high-net-worth individuals, and affluent and retail clients; corporate clients, small and medium-sized enterprises, external asset managers, and financial institutions; pension funds, governments, foundations and endowments, corporations, entrepreneurs, private individuals, financial sponsors, and sovereign clients. The company was founded in 1856 and is based in Zurich, Switzerland.

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