Banco Santander (SAN) and KB Financial Group (KB) Head-To-Head Review

Banco Santander (NYSE:SAN) and KB Financial Group (NYSE:KB) are both large-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, valuation, institutional ownership, risk, profitability, analyst recommendations and dividends.

Earnings and Valuation

This table compares Banco Santander and KB Financial Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Banco Santander $54.66 billion 1.48 $7.48 billion $0.52 9.69
KB Financial Group $13.29 billion 1.48 $3.10 billion $7.43 6.59

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

Analyst Recommendations

This is a summary of current ratings and target prices for Banco Santander and KB Financial Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Banco Santander 0 1 2 0 2.67
KB Financial Group 0 1 0 0 2.00

Banco Santander presently has a consensus target price of $6.20, suggesting a potential upside of 23.02%. KB Financial Group has a consensus target price of $61.00, suggesting a potential upside of 24.49%. Given KB Financial Group’s higher possible upside, analysts clearly believe KB Financial Group is more favorable than Banco Santander.

Profitability

This table compares Banco Santander and KB Financial Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Banco Santander 13.97% 7.55% 0.56%
KB Financial Group 22.13% 9.81% 0.75%

Dividends

Banco Santander pays an annual dividend of $0.23 per share and has a dividend yield of 4.6%. KB Financial Group pays an annual dividend of $1.47 per share and has a dividend yield of 3.0%. Banco Santander pays out 44.2% of its earnings in the form of a dividend. KB Financial Group pays out 19.8% 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. KB Financial Group has increased its dividend for 2 consecutive years.

Risk & Volatility

Banco Santander has a beta of 1.33, meaning that its share price is 33% more volatile than the S&P 500. Comparatively, KB Financial Group has a beta of 1.2, meaning that its share price is 20% more volatile than the S&P 500.

Insider & Institutional Ownership

1.6% of Banco Santander shares are owned by institutional investors. Comparatively, 5.8% of KB Financial Group shares are owned by institutional investors. 9.5% of Banco Santander shares are owned by insiders. Comparatively, 69.0% of KB Financial Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

KB Financial Group beats Banco Santander on 9 of the 17 factors compared between the two stocks.

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.

About KB Financial Group

KB Financial Group Inc., a financial holding company, provides a range of banking and related financial services to consumers and corporations in South Korea and internationally. It operates through Corporate Banking, Retail Banking, Other Banking Services, Securities Business, Non-life Insurance Business, Credit Card Business, and Life Insurance Business segments. The company offers deposit and credit products and services, and other related financial services to large, small, medium-sized enterprises and SOHOs, and individuals and households; and engages in trading in securities and derivatives, funding, and other supporting activities. It also provides investment banking, brokerage, and other supporting services; property and life insurance; and credit sale, cash service, and card loan services. In addition, the company offers foreign exchange transaction; financial investment; credit card and installment finance; security investment trust management and advisory; financial leasing; real estate trust management; capital investment; collection of receivables or credit investigation; software advisory, development, and supply; investment advisory and securities dealing; claim; management; asset-backed securitization; investment trust; trust asset management; and real estate services. KB Financial Group Inc. was founded in 2008 and is headquartered in Seoul, South Korea.

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