Royal Bank of Canada (RY) vs. Intesa Sanpaolo (ISNPY) Critical Analysis

Royal Bank of Canada (NYSE: RY) and Intesa Sanpaolo (OTCMKTS:ISNPY) are both large-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, risk, profitability, institutional ownership, earnings, dividends and analyst recommendations.

Profitability

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This table compares Royal Bank of Canada and Intesa Sanpaolo’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Royal Bank of Canada 21.64% 17.60% 0.96%
Intesa Sanpaolo N/A N/A N/A

Earnings and Valuation

This table compares Royal Bank of Canada and Intesa Sanpaolo’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Royal Bank of Canada $40.37 billion 2.76 $8.74 billion $6.06 12.75
Intesa Sanpaolo $17.50 billion 3.33 $4.35 billion $0.82 26.85

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

Dividends

Royal Bank of Canada pays an annual dividend of $2.88 per share and has a dividend yield of 3.7%. Intesa Sanpaolo pays an annual dividend of $0.87 per share and has a dividend yield of 4.0%. Royal Bank of Canada pays out 47.5% of its earnings in the form of a dividend. Intesa Sanpaolo pays out 106.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Insider and Institutional Ownership

41.4% of Royal Bank of Canada shares are held by institutional investors. Comparatively, 0.9% of Intesa Sanpaolo shares are held by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Royal Bank of Canada and Intesa Sanpaolo, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Royal Bank of Canada 1 6 2 0 2.11
Intesa Sanpaolo 0 1 1 0 2.50

Royal Bank of Canada currently has a consensus target price of $100.50, indicating a potential upside of 30.03%. Given Royal Bank of Canada’s higher possible upside, research analysts plainly believe Royal Bank of Canada is more favorable than Intesa Sanpaolo.

Risk and Volatility

Royal Bank of Canada has a beta of 1.12, indicating that its share price is 12% more volatile than the S&P 500. Comparatively, Intesa Sanpaolo has a beta of 1.26, indicating that its share price is 26% more volatile than the S&P 500.

Summary

Royal Bank of Canada beats Intesa Sanpaolo on 10 of the 15 factors compared between the two stocks.

About Royal Bank of Canada

Royal Bank of Canada, together with its subsidiaries, operates as a diversified financial service company worldwide. The company's Personal & Commercial Banking segment offers personal and business banking services, as well as auto financing and retail investment products. This segment also provides a suite of financial products and services to individual, business clients, and public institutions through its branch, automated teller machines, online, mobile, and telephone banking networks, as well as through sales professionals. Its Wealth Management segment offers a suite of investment, trust, banking, credit, and other wealth management solutions to high net worth and ultra-high net worth clients; and asset management products and services directly to institutional and individual clients through its distribution channels and third-party distributors. The company's Insurance segment provides life, health, home, auto, travel, wealth, group, and reinsurance products and solutions through retail insurance branches, field sales representatives, advice centers, and online network, as well as through independent insurance advisors and affinity relationships. Its Investor and Treasury Services segment offers asset services, custody, payments, and treasury services for financial and other institutional investors. This segment also provides cash management, correspondent banking, and trade finance for financial institutions; and short-term funding and liquidity management services. The company's Capital Markets segment offers corporate and investment banking, as well as equity and debt origination, distribution, and structuring and trading for public and private companies, institutional investors, governments, and central banks. Royal Bank of Canada was founded in 1864 and is headquartered in Toronto, Canada.

About Intesa Sanpaolo

Intesa Sanpaolo S.p.A. is a banking company. The Company’s segments include Banca dei Territori, Corporate and Investment Banking, International Subsidiary Banks, Asset Management, Private Banking and Insurance. The Banca dei Territori division includes the Company’s traditional lending and deposit collecting activities. The Corporate and Investment Banking Division includes corporate banking, investment banking and public finance in Italy and abroad. The International Subsidiary Banks Division oversees the Company’s commercial operations on international markets through subsidiary and associated banks primarily involved in retail banking operations. The Private Banking Division provides private and high net worth individuals with specific products and services. The Asset Management Division is engaged in developing asset management solutions. The Insurance Division oversees the management of the subsidiaries, Intesa Sanpaolo Vita S.p.A. and Fideuram Vita S.p.A.

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