Contrasting BBVA Banco Frances (BFR) & Banco Santander (SAN)

BBVA Banco Frances (NYSE: BFR) and Banco Santander (NYSE:SAN) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, earnings, profitability, risk and dividends.

Analyst Recommendations

This is a summary of recent ratings and target prices for BBVA Banco Frances and Banco Santander, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BBVA Banco Frances 0 1 1 0 2.50
Banco Santander 0 0 3 0 3.00

Banco Santander has a consensus price target of $6.20, indicating a potential upside of 19.46%. Given Banco Santander’s stronger consensus rating and higher possible upside, analysts plainly believe Banco Santander is more favorable than BBVA Banco Frances.

Earnings & Valuation

This table compares BBVA Banco Frances and Banco Santander’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
BBVA Banco Frances $1.83 billion 1.22 $234.24 million $1.14 9.54
Banco Santander $54.66 billion 1.52 $7.48 billion $0.52 9.98

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

Insider & Institutional Ownership

15.9% of BBVA Banco Frances shares are held by institutional investors. Comparatively, 1.6% of Banco Santander shares are held by institutional investors. 9.5% of Banco Santander shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

BBVA Banco Frances pays an annual dividend of $0.21 per share and has a dividend yield of 1.9%. Banco Santander pays an annual dividend of $0.23 per share and has a dividend yield of 4.4%. BBVA Banco Frances pays out 18.4% of its earnings in the form of a dividend. Banco Santander pays out 44.2% 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.

Profitability

This table compares BBVA Banco Frances and Banco Santander’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
BBVA Banco Frances N/A 10.96% 1.24%
Banco Santander 13.97% 7.55% 0.56%

Risk and Volatility

BBVA Banco Frances has a beta of 0.64, suggesting that its stock price is 36% less volatile than the S&P 500. Comparatively, Banco Santander has a beta of 1.43, suggesting that its stock price is 43% more volatile than the S&P 500.

Summary

Banco Santander beats BBVA Banco Frances on 11 of the 16 factors compared between the two stocks.

About BBVA Banco Frances

BBVA Banco Francés S.A., together with its subsidiaries, provides financial services to small and medium enterprises, and individual customers in Spain, Mexico, South America, the United States, Turkey, and rest of Eurasia. The company offers current, checking, and savings accounts, as well as demand and time deposits. It also provides personal and auto loans, and mortgages; loans to the public sector and local financial institutions, and short-term loans to companies, as well as overdraft lines of credit, discounted instruments, real estate mortgage loans, collateral loans, consumer loans, credit card loans, pre-financing and export financing, and short-term placements in foreign banks. In addition, the company offers fire, mixed family and comprehensive, civil liability, theft, personal accidents, umbrella life, debtor balances, funeral services, and other insurance coverage products; investment fund and pension fund management services; and stock exchange brokerage services. Further, it provides financing for the acquisition of new and second-hand Peugeot and Citroën vehicles through pledge loans, receivables from financial leases, and other financial products and in supplying services associated to the purchase, maintenance, and insurance coverage of motor vehicles; and secured loans for the purchase of VW, Audi, and Ducati new or second hand vehicles, credit through operating leases, and other financial products and services, as well as engages in security trading, investment banking, and other authorized operations. As of December 31, 2017, it operated a network of 251 retail branches, 15 in-company branches, 1 points of sale, and 2 point of express support, 797 ATMs, 822 self-service terminals, a telephone banking, and Internet banking services. The company was formerly known as Banco Francés S.A. and changed its name to BBVA Banco Francés S.A. in October 2000. The company was founded in 1886 and is headquartered in Buenos Aires, the Republic of Argentina.

About Banco Santander

Banco Santander, S.A., together with its subsidiaries, provides various retail and commercial banking products and services for individual and corporate clients worldwide. It offers demand and time deposits, and current and savings accounts; certificates of deposit; mortgages, auto finance, and personal loans; working capital finance; and debit and credit cards, as well as life and non-life insurance products. The company also provides cash management, trade finance, custody and securities, and securitization services; corporate loans; capital market products; and syndicated corporate finance services. In addition, it is involved in the corporate banking, treasury, and investment banking activities; fixed income and equity derivatives; trading and hedging derivatives; and brokerage of equities. Further, the company offers asset management, private banking, and processing services, as well as mobile and online banking services. It operates through a network of 13,697 branches. The company was formerly known as Banco Santander Central Hispano S.A. and changed its name to Banco Santander, S.A. in June 2007. Banco Santander, S.A. was founded in 1856 and is headquartered in Madrid, Spain.

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