Head-To-Head Analysis: Danske Bank (OTCMKTS:DNKEY) and Banco Santander Chile (NYSE:BSAC)

Banco Santander Chile (NYSE:BSAC) and Danske Bank (OTCMKTS:DNKEY) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, institutional ownership, profitability, analyst recommendations, risk, valuation and dividends.

Insider & Institutional Ownership

6.4% of Banco Santander Chile shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

Banco Santander Chile pays an annual dividend of $0.99 per share and has a dividend yield of 3.0%. Danske Bank pays an annual dividend of $0.76 per share and has a dividend yield of 3.0%. Banco Santander Chile pays out 43.0% of its earnings in the form of a dividend. Danske Bank pays out 36.0% 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.

Analyst Ratings

This is a summary of current ratings and recommmendations for Banco Santander Chile and Danske Bank, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Banco Santander Chile	2	4	0	0	1.67
Danske Bank	0	1	4	0	2.80

Banco Santander Chile presently has a consensus target price of $27.67, suggesting a potential downside of 16.15%. Given Banco Santander Chile’s higher probable upside, research analysts plainly believe Banco Santander Chile is more favorable than Danske Bank.

Valuation & Earnings

This table compares Banco Santander Chile and Danske Bank”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Banco Santander Chile	$4.50 billion	N/A	$1.11 billion	$2.30	14.35
Danske Bank	$8.61 billion	4.95	$3.49 billion	$2.11	12.10

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

Profitability

This table compares Banco Santander Chile and Danske Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Banco Santander Chile	24.57%	23.25%	1.60%
Danske Bank	40.52%	13.25%	0.62%

Risk and Volatility

Banco Santander Chile has a beta of 0.57, indicating that its stock price is 43% less volatile than the S&P 500. Comparatively, Danske Bank has a beta of 0.61, indicating that its stock price is 39% less volatile than the S&P 500.

About Banco Santander Chile

Banco Santander-Chile, together with its subsidiaries, provides commercial and retail banking services in Chile. It operates through Retail Banking, Middle-Market, Corporate Investment Banking, and Corporate Activities segments. The company offers debit and credit cards, checking accounts, and savings products; consumer, automobile, commercial, mortgage, and government-guaranteed loans; and Chilean peso and foreign currency-denominated loans to finance various commercial transactions, trade, foreign currency forward contracts, and credit lines, as well as mortgage financing services. It also provides mutual fund management, insurance and securities brokerage, foreign exchange services, financial leasing, financial consulting and advisory, investment management, foreign trade, leasing, factoring, treasury, and transactional services, as well as specialized services to finance residential projects. In addition, the company offers short-term financing and fundraising, and brokerage services, as well as derivatives, securitization, and other products; and manages capital allocations. It serves individuals, small to middle-sized entities, companies, and large corporations, as well as universities, government entities, and local and regional governments. The company was incorporated in 1977 and is headquartered in Santiago, Chile. Banco Santander-Chile operates as a subsidiary of Banco Santander, S.A.

About Danske Bank

Danske Bank A/S provides various banking products and services to corporate, institutional, and international clients. The company offers insurance and pension products, mortgage finance and real-estate brokerage services, asset management and trading services in fixed income products, foreign exchange services, and equities. It also provides advisory services to personal and private banking customers; and business advisory services, including acquisition, change of ownership, strategic development, or international expansion. In addition, the company offers financing, risk management, investment, and financial advisory services for large corporates and institutions; healthcare solutions; and online and mobile banking services. It has operations in Denmark, Finland, Sweden, Norway, the United Kingdom, and internationally. The company was founded in 1871 and is headquartered in Copenhagen, Denmark.