Intesa Sanpaolo (OTCMKTS:ISNPY) and Lloyds Banking Group (NYSE:LYG) Critical Comparison

Intesa Sanpaolo (OTCMKTS:ISNPY) and Lloyds Banking Group (NYSE:LYG) are both large-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, profitability, earnings, dividends and risk.

Dividends

Intesa Sanpaolo pays an annual dividend of $1.87 per share and has a dividend yield of 4.5%. Lloyds Banking Group pays an annual dividend of $0.26 per share and has a dividend yield of 4.8%. Intesa Sanpaolo pays out 52.7% of its earnings in the form of a dividend. Lloyds Banking Group pays out 59.1% 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.

Risk & Volatility

Intesa Sanpaolo has a beta of 0.8, meaning that its share price is 20% less volatile than the S&P 500. Comparatively, Lloyds Banking Group has a beta of 0.88, meaning that its share price is 12% less volatile than the S&P 500.

Earnings & Valuation

This table compares Intesa Sanpaolo and Lloyds Banking Group”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Intesa Sanpaolo	$43.96 billion	2.72	$10.54 billion	$3.55	11.62
Lloyds Banking Group	$25.61 billion	3.13	$6.14 billion	$0.44	12.38

Intesa Sanpaolo has higher revenue and earnings than Lloyds Banking Group. Intesa Sanpaolo is trading at a lower price-to-earnings ratio than Lloyds Banking Group, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Intesa Sanpaolo and Lloyds Banking Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Intesa Sanpaolo	23.71%	13.48%	0.98%
Lloyds Banking Group	25.11%	10.63%	0.53%

Institutional & Insider Ownership

1.2% of Intesa Sanpaolo shares are held by institutional investors. Comparatively, 2.2% of Lloyds Banking Group shares are held by institutional investors. 0.0% of Lloyds Banking Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and price targets for Intesa Sanpaolo and Lloyds Banking Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Intesa Sanpaolo	0	3	4	1	2.75
Lloyds Banking Group	0	3	8	0	2.73

About Intesa Sanpaolo

Intesa Sanpaolo S.p.A. provides various financial products and services primarily in Italy. It operates through six segments: Banca dei Territori, IMI Corporate & Investment Banking, International Subsidiary Banks, Asset Management, Private Banking, and Insurance. The company offers lending and deposit products; private and commercial banking, corporate and transaction banking, structured finance, investment banking, public finance, and capital markets; industrial credit, leasing, and factoring; asset management; life and non-life insurance and pension products; asset and wealth management; private investments; and bancassurance products. The company serves individuals, small and medium-sized businesses, non-profit customers, corporates and financial institutions, public administration, private clients and high net worth individuals, institutional clientele, and other customers. Intesa Sanpaolo S.p.A. was founded in 1998 and is headquartered in Turin, Italy.

About Lloyds Banking Group

Lloyds Banking Group plc, together with its subsidiaries, provides a range of banking and financial services in the United Kingdom and internationally. It operates in three segments: Retail; Commercial Banking; and Insurance, Pensions and Investments. The Retail segment offers a range of financial service products, including current accounts, savings, mortgages, motor finance, unsecured loans, leasing solutions, and credit cards to personal customers. The Commercial Banking segment provides lending, transactional banking, working capital management, risk management, and debt financing services to small and medium-sized entities, corporates, and institutions. The Insurance, Pensions, and Investments segment offers insurance, investment, and pension management products and services. It also provides digital banking services. The company offers its products and services under the Lloyds Bank, Halifax, Bank of Scotland, Scottish Widows, MBNA, Schroders Personal Wealth, Black Horse, Lex Autolease, Birmingham Midshires, LDC, AMC, Embark Group, Citra, IWeb, Cavendish Online, and Tusker brand names. Lloyds Banking Group plc was founded in 1695 and is headquartered in London, the United Kingdom.