Analyzing Sumitomo Mitsui Financial Grp (SMFG) & MFC Bancorp (MFCB)

Sumitomo Mitsui Financial Grp (NYSE:SMFG) and MFC Bancorp (NYSE:MFCB) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their earnings, dividends, institutional ownership, risk, profitability, analyst recommendations and valuation.

Institutional & Insider Ownership

2.6% of Sumitomo Mitsui Financial Grp shares are held by institutional investors. Comparatively, 31.4% of MFC Bancorp shares are held by institutional investors. 1.9% of MFC Bancorp shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current recommendations and price targets for Sumitomo Mitsui Financial Grp and MFC Bancorp, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sumitomo Mitsui Financial Grp 0 1 0 0 2.00
MFC Bancorp 0 0 1 0 3.00

MFC Bancorp has a consensus price target of $201.00, indicating a potential upside of 4,416.85%. Given MFC Bancorp’s stronger consensus rating and higher possible upside, analysts clearly believe MFC Bancorp is more favorable than Sumitomo Mitsui Financial Grp.

Profitability

This table compares Sumitomo Mitsui Financial Grp and MFC Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sumitomo Mitsui Financial Grp 13.14% 6.95% 0.41%
MFC Bancorp N/A N/A N/A

Volatility & Risk

Sumitomo Mitsui Financial Grp has a beta of 1.3, suggesting that its share price is 30% more volatile than the S&P 500. Comparatively, MFC Bancorp has a beta of 0.69, suggesting that its share price is 31% less volatile than the S&P 500.

Valuation and Earnings

This table compares Sumitomo Mitsui Financial Grp and MFC Bancorp’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sumitomo Mitsui Financial Grp $52.05 billion 0.98 $6.93 billion $1.01 7.17
MFC Bancorp $211.30 million 0.26 -$36.91 million N/A N/A

Sumitomo Mitsui Financial Grp has higher revenue and earnings than MFC Bancorp.

Dividends

Sumitomo Mitsui Financial Grp pays an annual dividend of $0.26 per share and has a dividend yield of 3.6%. MFC Bancorp does not pay a dividend. Sumitomo Mitsui Financial Grp pays out 25.7% of its earnings in the form of a dividend.

Summary

Sumitomo Mitsui Financial Grp beats MFC Bancorp on 8 of the 14 factors compared between the two stocks.

Sumitomo Mitsui Financial Grp Company Profile

Sumitomo Mitsui Financial Group, Inc., together with its subsidiaries, provides commercial banking, leasing, securities, consumer finance, and other services primarily in Japan. It operates through four segments: Wholesale Business, Retail Business, International Business, and Global Markets Business. The Wholesale Business segment provides financing, investment management, risk hedging and settlement services, as well as financial solutions for mergers and acquisition and other advisory services and leasing, primarily for large-and mid-sized corporate clients; and various leasing services, including equipment, and operating and leveraged leasing. The Retail Business segment offers wealth management, settlement services, consumer finance, and housing loans. The International Business segment provides loans, deposits, clearing services, trade finance, project finance, loan syndication, derivatives, and global cash management services; underwriting services; and leasing services related to the construction machinery, transportation equipment, industrial machinery, medical equipment, and aircraft leasing. As of March 31, 2018, this segment's network consisted of 18 branches, 22 sub-branches, and 4 representative offices. The Global Markets Business segment offers foreign exchange products, derivatives, bonds, stocks and other marketable financial products, and undertakes asset liability management operations. It also offers system development, data processing, management consulting, and economic research services; and investment advisory and investment trust management services. The company was founded in 1590 and is headquartered in Tokyo, Japan.

MFC Bancorp Company Profile

MFC Bancorp Ltd., a merchant banking company, provides various financial services for corporations and institutions worldwide. It operates through two segments, Merchant Banking and All Other. The company specializes in markets that are not adequately addressed by traditional sources of supply and finance, with focus on providing solutions for small and medium sized enterprises. It offers bank guarantees, letters of credit, factoring, other financing transactions, proprietary investing and advisory services, and merchant banking products and services. The company also holds various production assets, including a zinc alloy processing facility located in Slovakia; a natural gas power plant located in Alberta, Canada and a hydro-electric power plant located in Africa; a non-ferrous rolling mill in Germany; and a natural gas production and processing facility in Alberta, Canada, as well as a mining sub-lease of the lands upon which the Wabush iron ore mine is situated in Newfoundland and Labrador, Canada. In addition, it has interests in the hydrocarbon interests located in west central Alberta, Canada; and is involved in business activities related to medical equipment, instruments, supplies, and services. The company was formerly known as MFC Industrial Ltd. and changed its name to MFC Bancorp Ltd. in July 2017. MFC Bancorp Ltd. was incorporated in 2017 and is based in Dublin, Ireland.

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