Reviewing Banco Santander (NYSE:SAN) & Bank of N.T. Butterfield & Son (NYSE:NTB)

Bank of N.T. Butterfield & Son (NYSE:NTB) and Banco Santander (NYSE:SAN) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, dividends, risk, analyst recommendations, institutional ownership, valuation and earnings.

Institutional and Insider Ownership

71.8% of Bank of N.T. Butterfield & Son shares are held by institutional investors. Comparatively, 1.7% 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 is poised for long-term growth.

Dividends

Banco Santander pays an annual dividend of $0.21 per share and has a dividend yield of 5.2%. Bank of N.T. Butterfield & Son does not pay a dividend. Banco Santander pays out 38.2% of its earnings in the form of a dividend. Banco Santander has raised its dividend for 2 consecutive years.

Profitability

This table compares Bank of N.T. Butterfield & Son and Banco Santander’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Bank of N.T. Butterfield & Son 34.60% 22.69% 1.84%
Banco Santander 14.99% 7.27% 0.53%

Earnings and Valuation

This table compares Bank of N.T. Butterfield & Son and Banco Santander’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Bank of N.T. Butterfield & Son $517.80 million 2.97 $195.18 million $3.53 7.97
Banco Santander $57.19 billion 1.13 $9.22 billion $0.55 7.31

Banco Santander has higher revenue and earnings than Bank of N.T. Butterfield & Son. Banco Santander is trading at a lower price-to-earnings ratio than Bank of N.T. Butterfield & Son, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Bank of N.T. Butterfield & Son has a beta of 1.79, suggesting that its stock price is 79% more volatile than the S&P 500. Comparatively, Banco Santander has a beta of 1.14, suggesting that its stock price is 14% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Bank of N.T. Butterfield & Son and Banco Santander, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bank of N.T. Butterfield & Son 0 2 2 0 2.50
Banco Santander 0 2 3 0 2.60

Bank of N.T. Butterfield & Son currently has a consensus price target of $44.00, suggesting a potential upside of 56.36%. Banco Santander has a consensus price target of $6.00, suggesting a potential upside of 49.25%. Given Bank of N.T. Butterfield & Son’s higher probable upside, analysts clearly believe Bank of N.T. Butterfield & Son is more favorable than Banco Santander.

Summary

Bank of N.T. Butterfield & Son beats Banco Santander on 10 of the 17 factors compared between the two stocks.

About Bank of N.T. Butterfield & Son

The Bank of N.T. Butterfield & Son Limited provides a range of community, commercial, and private banking services to individuals and small to medium-sized businesses. It accepts retail and corporate checking, savings, term, and non-interest bearing deposits, as well as certificates of deposit. The company's lending portfolio includes residential mortgage lending, automobile financing, consumer financing, credit cards, overdraft facilities, commercial real estate lending, and commercial and industrial loans. It also offers investment products and services; and cash and liquidity management, foreign exchange, custody administration, and settlement services. In addition, the company provides personal and property/auto insurance products; letters of credit; and cash management, payroll, remote banking, money market, advisory, brokerage, trust, estate, company management, private banking, administered banking services, and fiduciary services. Further, it offers debit cards; automated teller machines; personal and business deposit, merchant acquiring, and mobile/online banking services. The company operates through offices in the Cayman Islands, Guernsey, Jersey, the United Kingdom, The Bahamas, Switzerland, Singapore, Mauritius, and Canada, as well as through four branch locations in Bermuda and three branch locations in the Cayman Islands. The Bank of N.T. Butterfield & Son Limited was founded in 1858 and is headquartered in Hamilton, Bermuda.

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; mortgages, consumer finance, auto finance, and personal loans; export and agency finance, trade and working capital solutions, syndicated corporate loans, and structured financing; debt capital markets and global markets services; and debit and credit cards. The company also provides cash management, transactional, payrolls, and wealth management services. In addition, it is involved in the corporate banking, treasury, and investment banking activities; and real estate investment, leasing, securitization, fund management, e-commerce, technology services, air transport, renting, insurance brokerage, aircraft rental, payments and collection, securities investment, financial advisory, sports, electricity production, and Internet activities. Further, the company offers asset management and private banking services, as well as mobile and online banking services. It operates through a network of 13,217 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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