Critical Comparison: Svenska Handelsbanken Ab Publ (OTCMKTS:SVNLY) vs. Banco Santander (NYSE:SAN)

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

Earnings and Valuation

This table compares Banco Santander 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
Banco Santander	$66.96 billion	2.83	$13.61 billion	$0.94	13.56
Svenska Handelsbanken Ab Publ	$17.44 billion	1.78	$2.60 billion	$0.61	12.89

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

Dividends

Banco Santander pays an annual dividend of $0.19 per share and has a dividend yield of 1.5%. Svenska Handelsbanken Ab Publ pays an annual dividend of $0.59 per share and has a dividend yield of 7.5%. Banco Santander pays out 20.2% 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.

Institutional and Insider Ownership

9.2% of Banco Santander shares are held by institutional investors. 9.5% of Banco Santander shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Banco Santander and Svenska Handelsbanken Ab Publ, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Banco Santander	1	4	3	0	2.25
Svenska Handelsbanken Ab Publ	2	5	0	0	1.71

Risk & Volatility

Banco Santander has a beta of 0.73, indicating that its share price is 27% less volatile than the S&P 500. Comparatively, Svenska Handelsbanken Ab Publ has a beta of 0.57, indicating that its share price is 43% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Banco Santander	17.90%	11.68%	0.70%
Svenska Handelsbanken Ab Publ	15.97%	12.80%	0.68%

Summary

Banco Santander beats Svenska Handelsbanken Ab Publ on 13 of the 15 factors compared between the two stocks.

About Banco Santander

Banco Santander, S.A. provides various financial services worldwide. The company operates through Retail Banking, Santander Corporate & Investment Banking, Wealth Management & Insurance, and PagoNxt segments. It offers demand and time deposits, mutual funds, and current and savings accounts; mortgages, consumer finance, loans, and various financing solutions; and project finance, debt capital markets, global transaction banking, and corporate finance services. The company also provides asset management and private banking services; and insurance products. In addition, it offers corporate and investment banking services; and digital payment solutions. Further, it offers online banking and financial services to retail, business, institutional, corporate, private banking and university customers and clients. The company was formerly known as Banco Santander Central Hispano SA and changed its name to Banco Santander, S.A. in February 2007. Banco Santander, S.A. was founded in 1856 and is headquartered in Madrid, Spain.

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.