Mizuho Financial Group (NYSE:MFG) and Mitsubishi UFJ Financial Group (NYSE:MUFG) Critical Analysis

Mizuho Financial Group (NYSE:MFG) and Mitsubishi UFJ Financial Group (NYSE:MUFG) are both large-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, analyst recommendations, risk, institutional ownership, dividends, valuation and earnings.

Valuation and Earnings

This table compares Mizuho Financial Group and Mitsubishi UFJ Financial Group”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mizuho Financial Group	$60.35 billion	1.99	$8.24 billion	$0.76	12.81
Mitsubishi UFJ Financial Group	$97.13 billion	2.47	$16.02 billion	$1.41	14.33

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

Volatility & Risk

Mizuho Financial Group has a beta of 0.45, suggesting that its share price is 55% less volatile than the S&P 500. Comparatively, Mitsubishi UFJ Financial Group has a beta of 0.4, suggesting that its share price is 60% less volatile than the S&P 500.

Profitability

This table compares Mizuho Financial Group and Mitsubishi UFJ Financial Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Mizuho Financial Group	16.35%	15.19%	0.45%
Mitsubishi UFJ Financial Group	16.65%	11.07%	0.60%

Dividends

Mizuho Financial Group pays an annual dividend of $0.14 per share and has a dividend yield of 1.4%. Mitsubishi UFJ Financial Group pays an annual dividend of $0.19 per share and has a dividend yield of 0.9%. Mizuho Financial Group pays out 18.4% of its earnings in the form of a dividend. Mitsubishi UFJ Financial Group pays out 13.5% 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 Recommendations

This is a breakdown of current ratings and price targets for Mizuho Financial Group and Mitsubishi UFJ Financial Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mizuho Financial Group	0	1	1	0	2.50
Mitsubishi UFJ Financial Group	0	1	3	1	3.00

Insider and Institutional Ownership

3.3% of Mizuho Financial Group shares are held by institutional investors. Comparatively, 13.6% of Mitsubishi UFJ Financial Group shares are held by institutional investors. 0.0% of Mizuho Financial Group shares are held by company insiders. Comparatively, 0.0% of Mitsubishi UFJ Financial Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Mitsubishi UFJ Financial Group beats Mizuho Financial Group on 12 of the 15 factors compared between the two stocks.

About Mizuho Financial Group

Mizuho Financial Group, Inc., together with its subsidiaries, engages in banking, trust, securities, and other businesses related to financial services in Japan, the Americas, Europe, Asia/Oceania, and internationally. It operates through Retail & Business Banking Company, Corporate & Institutional Company, Global Corporate Company, Global Markets Company, Asset Management Company, and Others segments. The company provides deposit products; syndicated, housing, and card loans; business matching services; and advisory services related to overseas expansions, and mergers and acquisitions-related services. It also offers consulting services, including asset management and asset succession; payroll services; and sells lottery tickets issued by prefectures and ordinance-designated cities. In addition, it offers fund management, underwriting of equity and bonds, risk hedging products, etc. for corporate customers; solutions based on capital management, business strategy, and financial strategy; real estate services; advisory services and solutions, such as advice on proposals on various investment products to financial institutions; and financial services that include funding support and public bonds underwriting. Further, the company offers corporate finance and transaction banking srvices; sales and trading services; investment products; pension funds; and ALM and investment services, including stable capital raising and balance sheet management, as well as management of fixed income, equity, and other securities portfolios. Additionally, the company provides online banking, cash management solutions, currency transaction, trade finance, custody, yen correspondence settlement, and research and consulting services; trust, securitization and structured finance, and stock transfers; and private banking and information technology-related services. Mizuho Financial Group, Inc. was founded in 2000 and is headquartered in Tokyo, Japan.

About Mitsubishi UFJ Financial Group

Mitsubishi UFJ Financial Group, Inc. operates as the bank holding company, that engages in a range of financial businesses in Japan, the United States, Europe, Asia/Oceania, and internationally. It operates through seven segments: Digital Service, Retail & Commercial Banking, Japanese Corporate & Investment Banking, Global Commercial Banking, Asset Management & Investor Services, Global Corporate & Investment Banking, and Global Markets. The company offers commercial banking, trust banking, and securities products and services to retail, and small and medium-sized enterprise customers. It also provides mergers and acquisition, debt and equity issuance, financial advice, and real estate-related services; digital-based financial services; credit cards; and trust banking and securities products and services, as well as engages in the lending, fund settlement, and foreign exchange businesses. In addition, the company offers corporate banking services, such as project export credit agency finance, and financing through asset-backed commercial paper; investment and transaction banking services for corporations, financial institutions, sovereign and multinational organizations, and institutional investors; and asset management and investor services, including pension fund management and administration, pension structure advisory, beneficiary payment, and investment trust services for retail customers. Further, it provides loans, deposits, fund transfers, hedging, and investments services for retail, small and medium-sized enterprise, as well as corporate customers; financing for automotive and consumer goods; sells and trades in fixed income instruments, currencies, equities, and equities; offers investment products comprising mutual funds, structured bonds, and notes; originates and distributes of financial products; and provides insurance and treasury services. The company was founded in 1880 and is headquartered in Tokyo, Japan.