Analyzing Itau Unibanco (NYSE:ITUB) & Svenska Handelsbanken Ab Publ (OTCMKTS:SVNLY)

Itau Unibanco (NYSE:ITUB) and Svenska Handelsbanken Ab Publ (OTCMKTS:SVNLY) are both large-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, profitability, valuation, risk, dividends and analyst recommendations.

Analyst Recommendations

This is a summary of current recommendations for Itau Unibanco and Svenska Handelsbanken Ab Publ, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Itau Unibanco	0	1	2	1	3.00
Svenska Handelsbanken Ab Publ	2	5	0	0	1.71

Itau Unibanco presently has a consensus price target of $7.77, indicating a potential downside of 6.18%. Given Itau Unibanco’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Itau Unibanco is more favorable than Svenska Handelsbanken Ab Publ.

Profitability

This table compares Itau Unibanco and Svenska Handelsbanken Ab Publ’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Itau Unibanco	16.30%	19.60%	1.49%
Svenska Handelsbanken Ab Publ	15.97%	12.80%	0.68%

Earnings & Valuation

This table compares Itau Unibanco and Svenska Handelsbanken Ab Publ”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Itau Unibanco	$62.19 billion	1.47	$7.62 billion	$0.70	11.83
Svenska Handelsbanken Ab Publ	$17.44 billion	1.76	$2.60 billion	$0.61	12.74

Itau Unibanco has higher revenue and earnings than Svenska Handelsbanken Ab Publ. Itau Unibanco is trading at a lower price-to-earnings ratio than Svenska Handelsbanken Ab Publ, indicating that it is currently the more affordable of the two stocks.

Dividends

Itau Unibanco pays an annual dividend of $0.03 per share and has a dividend yield of 0.4%. Svenska Handelsbanken Ab Publ pays an annual dividend of $0.59 per share and has a dividend yield of 7.6%. Itau Unibanco pays out 4.3% of its earnings in the form of a dividend. Svenska Handelsbanken Ab Publ pays out 96.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Volatility and Risk

Itau Unibanco has a beta of 0.65, suggesting that its stock price is 35% less volatile than the S&P 500. Comparatively, Svenska Handelsbanken Ab Publ has a beta of 0.57, suggesting that its stock price is 43% less volatile than the S&P 500.

Summary

Itau Unibanco beats Svenska Handelsbanken Ab Publ on 12 of the 15 factors compared between the two stocks.

About Itau Unibanco

Itaú Unibanco Holding S.A. offers a range of financial products and services to individuals and corporate customers in Brazil and internationally. The company operates through three segments: Retail Banking, Wholesale Banking, and Activities with the Market + Corporation. It offers current account; loans; credit and debit cards; investment and commercial banking services; real estate lending services; financing and investment services; economic, financial and brokerage advisory; and leasing and foreign exchange services. The company also provides property and casualty insurance products covering loss, damage, or liabilities for assets or persons, as well as life insurance products covering death and personal accident. It serves retail customers, account and non-account holders, individuals and legal entities, high income clients, microenterprises, and small companies, as well as middle-market companies and high net worth clients. The company was formerly known as Itaú Unibanco Banco Múltiplo S.A. and changed its name to Itaú Unibanco Holding S.A. in April 2009. The company was incorporated in 1924 and is headquartered in São Paulo, Brazil. Itaú Unibanco Holding S.A. operates as a subsidiary of IUPAR – Itaú Unibanco Participações S.A.

About Svenska Handelsbanken Ab Publ

Svenska Handelsbanken AB (publ) provides various banking products and services for private and corporate customers primarily in Sweden, the United Kingdom, Norway, the Netherlands, the United States, Luxembourg, Finland, and Poland. The company offers savings, transactions, business, currency, and investment accounts, as well as accounts for cash pool, and forestry and agriculture; mortgage and committed loans, and private loans; mutual funds; pension products; credit and debit cards; and payment and reconciliation services, as well as foreign exchange rate services. It also provides financing for investments, such as equipment, cars, computers, and other inventories, as well as vehicle and real estate financing services; green loans and advisor services; investment and other financing services; medical care, and group and health insurance products; forestry and farming banking products; and online and mobile banking services, as well as various banking services for children and young people. In addition, the company offers financial services, that includes asset management, transactional banking, corporate finance, financing, markets, trade finance, market information and research services to large corporations; cash management solutions; and various corporate banking services to small and medium-sized companies and large corporates, as well as private banking services. Svenska Handelsbanken AB (publ) was incorporated in 1871 and is headquartered in Stockholm, Sweden.