Contrasting Banco de Chile (BCH) & Banco Santander Mexico Sa Instcn De (BSMX)

Banco de Chile (NYSE:BCH) and Banco Santander Mexico Sa Instcn De (NYSE:BSMX) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, profitability, valuation, analyst recommendations, dividends, earnings and institutional ownership.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Banco de Chile and Banco Santander Mexico Sa Instcn De, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Banco de Chile 3 2 0 0 1.40
Banco Santander Mexico Sa Instcn De 0 0 3 0 3.00

Banco de Chile presently has a consensus target price of $91.00, suggesting a potential upside of 2.52%. Banco Santander Mexico Sa Instcn De has a consensus target price of $9.00, suggesting a potential upside of 15.38%. Given Banco Santander Mexico Sa Instcn De’s stronger consensus rating and higher possible upside, analysts plainly believe Banco Santander Mexico Sa Instcn De is more favorable than Banco de Chile.

Risk and Volatility

Banco de Chile has a beta of 0.35, indicating that its share price is 65% less volatile than the S&P 500. Comparatively, Banco Santander Mexico Sa Instcn De has a beta of 1.47, indicating that its share price is 47% more volatile than the S&P 500.

Profitability

This table compares Banco de Chile and Banco Santander Mexico Sa Instcn De’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Banco de Chile 25.37% 17.90% 1.74%
Banco Santander Mexico Sa Instcn De 16.49% 15.35% 1.41%

Valuation & Earnings

This table compares Banco de Chile and Banco Santander Mexico Sa Instcn De’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Banco de Chile $3.84 billion 3.92 $929.56 million $5.53 16.05
Banco Santander Mexico Sa Instcn De $6.23 billion 0.83 $989.93 million $0.69 11.30

Banco Santander Mexico Sa Instcn De has higher revenue and earnings than Banco de Chile. Banco Santander Mexico Sa Instcn De is trading at a lower price-to-earnings ratio than Banco de Chile, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

1.3% of Banco de Chile shares are held by institutional investors. Comparatively, 27.9% of Banco Santander Mexico Sa Instcn De shares are held 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.

Dividends

Banco de Chile pays an annual dividend of $2.32 per share and has a dividend yield of 2.6%. Banco Santander Mexico Sa Instcn De pays an annual dividend of $0.37 per share and has a dividend yield of 4.7%. Banco de Chile pays out 42.0% of its earnings in the form of a dividend. Banco Santander Mexico Sa Instcn De pays out 53.6% 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. Banco de Chile has raised its dividend for 6 consecutive years.

Banco de Chile Company Profile

Banco de Chile provides various banking products and services to individuals, corporate clients, large companies, and small and medium-sized companies in Chile and internationally. The company operates through four segments: Retail, Wholesale, Treasury, and Subsidiaries. It offers checking accounts; personal, car, and mortgage loans; credit cards; credit lines; and investment products, such as fixed-term, automatic renewal, and tax benefit deposits, as well as stocks, portfolio management, voluntary retirement savings/mutual funds, foreign currency, and fixed income investment products. The company also provides insurance products and trust commissions, as well as financial consultancy services related to mergers and acquisitions, liabilities financing and restructuring, capital contribution, bonds and stocks emissions, and international business. In addition, it offers debt instruments; derivative contracts; and liquidity management, currency trading, foreign exchange transaction, international and treasury banking, securities brokerage, mutual fund and investment management, and securitization services, as well as payment management and collection services. Further, the company provides financing for importers and exporters; and factoring, leasing, express payment, electronic banking, and online payment services. It operates a network of approximately 423 branches and 1,453 ATMs. Banco de Chile was founded in 1855 and is headquartered in Santiago, Chile.

Banco Santander Mexico Sa Instcn De Company Profile

Banco Santander (México), S.A., Institución de Banca Múltiple, Grupo Financiero Santander México provides various banking products and services in Mexico. The company operates through Retail Banking and Global Corporate Banking segments. It offers various deposit products, such as current accounts, savings accounts, and time deposits, as well as certificates of interbank deposits; and payroll loans, personal loans, credit cards, mortgages, and insurance brokerage services. The company also provides cash management, working capital solutions, and trade finance; structured credit and debt products, project finance, and asset based finance; financial and strategic advisory services for mergers and acquisition; solutions and services for investing and hedging; and Internet and mobile banking services. It serves individuals, private banking clients, small and medium-sized enterprises, government institutions, and corporate and institutional customers. As of December 31, 2017, it operated through a network of 1,375 offices; 7,323 ATMs; and 2,784 contact center positions. The company was formerly known as Banco Santander (México), S.A., Institución de Banca Múltiple, Grupo Financiero Santander and changed its name to Banco Santander (México), S.A., Institución de Banca Múltiple, Grupo Financiero Santander México in September 2012. The company was founded in 1932 and is headquartered in Mexico City, Mexico. Banco Santander (México), S.A., Institución de Banca Múltiple, Grupo Financiero Santander México is a subsidiary of Grupo Financiero Santander México, S.A. de C.V.

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