Contrasting Shinhan Financial Group (NYSE:SHG) and Bank Hapoalim (OTCMKTS:BKHYY)

Shinhan Financial Group (NYSE:SHG) and Bank Hapoalim (OTCMKTS:BKHYY) are both large-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, valuation, dividends, institutional ownership, profitability, earnings and risk.

Valuation & Earnings

This table compares Shinhan Financial Group and Bank Hapoalim”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Shinhan Financial Group	$23.83 billion	1.26	$3.48 billion	$9.21	6.86
Bank Hapoalim	$12.56 billion	2.75	$2.84 billion	$10.79	12.22

Shinhan Financial Group has higher revenue and earnings than Bank Hapoalim. Shinhan Financial Group is trading at a lower price-to-earnings ratio than Bank Hapoalim, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Shinhan Financial Group and Bank Hapoalim, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Shinhan Financial Group	0	1	1	0	2.50
Bank Hapoalim	0	2	0	0	2.00

Dividends

Shinhan Financial Group pays an annual dividend of $1.86 per share and has a dividend yield of 2.9%. Bank Hapoalim pays an annual dividend of $3.55 per share and has a dividend yield of 2.7%. Shinhan Financial Group pays out 20.2% of its earnings in the form of a dividend. Bank Hapoalim pays out 32.9% 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. Shinhan Financial Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility & Risk

Shinhan Financial Group has a beta of 0.97, suggesting that its share price is 3% less volatile than the S&P 500. Comparatively, Bank Hapoalim has a beta of 1.21, suggesting that its share price is 21% more volatile than the S&P 500.

Institutional & Insider Ownership

7.8% of Shinhan Financial Group shares are owned by institutional investors. 1.0% of Shinhan Financial Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Shinhan Financial Group and Bank Hapoalim’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Shinhan Financial Group	20.07%	11.02%	0.86%
Bank Hapoalim	22.10%	14.89%	1.24%

Summary

Shinhan Financial Group beats Bank Hapoalim on 8 of the 15 factors compared between the two stocks.

About Shinhan Financial Group

Shinhan Financial Group Co., Ltd. provides financial products and services in South Korea and internationally. The company operates through six segments: Banking, Credit Card, Securities, Insurance, Credit, and Others. It offers retail banking services, including demand, savings, and fixed deposit-taking; checking accounts; mortgage and home equity, and retail lending; electronic banking and automatic teller machines (ATM); and bill paying, payroll and check-cashing, currency exchange, and wire fund transfer services. The company also provides corporate banking services, such as investment banking, real estate financing, overseas real estate and development project financing, infrastructure and structured financing, equity/venture investments, mergers and acquisitions consulting; securitization and derivatives services comprising securities and derivative products, and foreign exchange trading; business expansion financing and consulting services; and working capital loans and facilities loans. In addition, it is involved in treasury and investment activities in international capital markets consisting of foreign currency-denominated securities trading, foreign exchange trading and services, trade-related financial services, international factoring services, and foreign banking operations. Further, the company offers real estate trust, investment advisory, venture business investment, life and non-life insurance, trust account management, securities brokerage, and asset management services, as well as leasing and equipment financing, savings banking, loan collection and credit reporting, collective investment administration, private equity investment, and financial system development services. Additionally, it provides transaction history inquiries and fund transfers, opening letters of credit, trade finance, payment and collection management, sales and acquisition settlement, business-to-business settlement, sweeping, pooling, ERP interface, host-to-host banking, SWIFT SCORE, and cash and liquidity management service. Shinhan Financial Group Co., Ltd. was founded in 1982 and is headquartered in Seoul, South Korea.

About Bank Hapoalim

Bank Hapoalim B.M., together with its subsidiaries, provides various banking and financial products and services in Israel and internationally. It operates through Household, Private Banking, Small businesses and micro businesses, Mid-sized businesses, Large businesses, Institutional entities, and Financial management segments. The company offers account-management services, lending for various purposes, deposits, and savings plans, and capital-market service; housing loans; research and advisory services; and pension advisory and retirement planning services. It also provides products and services for the expansion of a business, advanced digital services, and a service center specializing in businesses; credit for routine operations and investment financing, guarantees, letters of credit, foreign trade, and transactions in financial and derivative instruments, as well as investment services in various channels, such as foreign currency, shekels, and securities. In addition, the company offers financial services, including foreign-trade financing, financing of working capital, financing of assets overseas, complex financing transactions, syndication, and credit-risk transfers; and financing of construction projects, granting credit to customers, and issuing guarantees to buyers of homes. Further, it provides managers of mutual funds, managers of investment portfolios, and managers of provident funds, study funds, and pension funds; trading activities; underwriting services; and brokerage and custody services. The company serves households, private-banking customers, foreign residents, small businesses, financial-asset managers, middle-market business clients, and large corporations. Bank Hapoalim B.M. was founded in 1921 and is based in Tel Aviv, Israel.