Critical Analysis: Deutsche Bank Aktiengesellschaft (NYSE:DB) vs. Erste Group Bank (OTCMKTS:EBKDY)

Erste Group Bank (OTCMKTS:EBKDY) and Deutsche Bank Aktiengesellschaft (NYSE:DB) are both large-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, valuation, earnings, analyst recommendations, institutional ownership, profitability and risk.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Erste Group Bank and Deutsche Bank Aktiengesellschaft, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Erste Group Bank	0	3	3	2	2.88
Deutsche Bank Aktiengesellschaft	0	6	4	0	2.40

Profitability

This table compares Erste Group Bank and Deutsche Bank Aktiengesellschaft’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Erste Group Bank	19.27%	10.96%	1.01%
Deutsche Bank Aktiengesellschaft	10.43%	7.69%	0.44%

Institutional & Insider Ownership

0.4% of Erste Group Bank shares are held by institutional investors. Comparatively, 27.9% of Deutsche Bank Aktiengesellschaft shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Volatility & Risk

Erste Group Bank has a beta of 0.84, meaning that its stock price is 16% less volatile than the S&P 500. Comparatively, Deutsche Bank Aktiengesellschaft has a beta of 0.94, meaning that its stock price is 6% less volatile than the S&P 500.

Valuation & Earnings

This table compares Erste Group Bank and Deutsche Bank Aktiengesellschaft”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Erste Group Bank	$23.77 billion	1.85	$3.97 billion	$4.68	12.07
Deutsche Bank Aktiengesellschaft	$68.84 billion	0.88	$7.47 billion	$3.63	8.58

Deutsche Bank Aktiengesellschaft has higher revenue and earnings than Erste Group Bank. Deutsche Bank Aktiengesellschaft is trading at a lower price-to-earnings ratio than Erste Group Bank, indicating that it is currently the more affordable of the two stocks.

Summary

Erste Group Bank beats Deutsche Bank Aktiengesellschaft on 8 of the 13 factors compared between the two stocks.

About Erste Group Bank

Erste Group Bank AG provides a range of banking and other financial services to retail, corporate, and public sector customers. The company operates through Retail, Corporates, Group Markets, Asset/Liability Management & Local Corporate Center, Savings Banks, and Group Corporate Center segments. It provides mortgage and consumer loans, investment products, current accounts, savings products, and credit cards, as well as cross selling products, such as leasing, insurance, and building society products. The company also offers factoring and accounts receivable purchasing; investment, acquisition and leveraged, project, and commercial real estate finance; interest rate and currency hedging, letters of credit, documentary collections, and guarantees; account management, payments, digital-banking, cash logistics, and payment factory and cash pooling services; documentary collection, equity interests and investments, revolving export credits lines, letters of credit, customer financing, and export guarantee; and loan syndication, and debt and equity capital market services. In addition, it provides cash management, trade finance, customer referral, markets execution, debt capital markets, and custody and brokerage services. Further, the company offers corporate finance; portfolio management; trading and market; trade execution, market making, and short-term liquidity management; and asset/liability management services, as well as working capital and bridge loans. It operates in Austria, the Czech Republic, Slovakia, Romania, Hungary, Serbia, Croatia, and internationally. The company was founded in 1819 and is headquartered in Vienna, Austria.

About Deutsche Bank Aktiengesellschaft

Deutsche Bank Aktiengesellschaft, a stock corporation, provides corporate and investment banking, and asset management products and services to private individuals, corporate entities, and institutional clients in Germany, the United Kingdom, rest of Europe, the Middle East, Africa, the Americas, and the Asia-Pacific. It operates through Corporate Bank, Investment Bank, Private Bank, and Asset Management segments. The Corporate Bank segment offers cash management, trade finance and lending, trust and agency, and securities services, as well as risk management solutions. The Investment Bank segment provides debt origination, merger and acquisitions, foreign exchange, and equity advisory and origination platform services. The Private Bank segment offers payment and account services, and credit and deposit products, as well as investment advice products, such as environmental, social, and governance products. This segment also provides banking, wealth management, other financial, and postal and parcel services; and supports in planning, managing and investing wealth, financing personal and business interests, and servicing institutional and corporate needs. The Asset Management segment offers investment solutions, such as alternative investments, which include real estate, infrastructure, liquid real assets, and sustainable investments; and various other services, including insurance and pension solutions, asset liability management, portfolio management solutions, and asset allocation advisory to individuals and institutions. Deutsche Bank Aktiengesellschaft was founded in 1870 and is headquartered in Frankfurt am Main, Germany.