Akbank Turk Anonim Sirketi (OTCMKTS:AKBTY) versus NU (NYSE:NU) Critical Review

Akbank Turk Anonim Sirketi (OTCMKTS:AKBTY) and NU (NYSE:NU) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, dividends, profitability, institutional ownership, risk and valuation.

Risk & Volatility

Akbank Turk Anonim Sirketi has a beta of 0.63, suggesting that its share price is 37% less volatile than the S&P 500. Comparatively, NU has a beta of 0.95, suggesting that its share price is 5% less volatile than the S&P 500.

Earnings & Valuation

This table compares Akbank Turk Anonim Sirketi and NU”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Akbank Turk Anonim Sirketi	$19.70 billion	0.45	$1.45 billion	$0.58	5.88
NU	$11.91 billion	5.13	$2.87 billion	$0.65	19.38

NU has lower revenue, but higher earnings than Akbank Turk Anonim Sirketi. Akbank Turk Anonim Sirketi is trading at a lower price-to-earnings ratio than NU, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Akbank Turk Anonim Sirketi and NU’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Akbank Turk Anonim Sirketi	7.87%	21.12%	1.83%
NU	18.20%	30.91%	4.80%

Insider and Institutional Ownership

84.0% of NU shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Akbank Turk Anonim Sirketi and NU, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Akbank Turk Anonim Sirketi	0	0	0	0	0.00
NU	1	4	9	0	2.57

NU has a consensus target price of $17.08, indicating a potential upside of 35.57%. Given NU’s stronger consensus rating and higher possible upside, analysts clearly believe NU is more favorable than Akbank Turk Anonim Sirketi.

Dividends

Akbank Turk Anonim Sirketi pays an annual dividend of $0.08 per share and has a dividend yield of 2.3%. NU pays an annual dividend of $1.67 per share and has a dividend yield of 13.3%. Akbank Turk Anonim Sirketi pays out 13.8% of its earnings in the form of a dividend. NU pays out 256.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

NU beats Akbank Turk Anonim Sirketi on 13 of the 15 factors compared between the two stocks.

About Akbank Turk Anonim Sirketi

Akbank T.A.S., together with its subsidiaries, provides various banking products and services in Turkey and internationally. It operates through Consumer Banking and Private Banking; Commercial Banking, Corporate Banking, and SME Banking; and Treasury, Other, and Unallovated segments. The company’s consumer banking services comprise deposit accounts, retail loans, commercial installment loans, credit cards, insurance products, and asset management services, as well as bank cards, investment funds trading, automatic payment, foreign currency trading, safe deposit box rental, cheques, money transfer, investment banking, and telephone and internet banking. It also offers services to large, medium, and small size corporate and commercial customers that include Turkish Lira (TL) and foreign currency denominated working capital loans financing for investments, foreign trade financing, derivative instruments for hedging purposes of foreign currency and interest risk, letters of credit, foreign currency trading, corporate finance, and deposit and cash management services, as well as project finance loans; and working capital management, delivering cash management services based on customers’ requests, such as collection and payment services, and liquidity and information management. In addition, the company engages in treasury activities consisting of TL and foreign currency spot and forward transactions, treasury and government bonds, Eurobonds, and private sector bond transactions, as well as derivative trading activities; and marketing and pricing activities related to treasury products. Further, it provides financial leasing services, investment and pension funds management, and portfolio management, as well as offers payment services and issues electronic money. Akbank T.A.S. was incorporated in 1948 and is headquartered in Istanbul, Turkey.

About NU

Nu Holdings Ltd. is a holding company, which engages in the provision of digital banking services. The company was founded by David Vélez Osorno, Cristina Helena Zingaretti Junqueira, and Adam Edward Wible on February 26, 2016 and is headquartered in George Town, Cayman Islands.