Itau Unibanco (NYSE:ITUB) versus Banco Bilbao Viscaya Argentaria (NYSE:BBVA) Critical Comparison

Banco Bilbao Viscaya Argentaria (NYSE:BBVA) and Itau Unibanco (NYSE:ITUB) are both large-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, analyst recommendations, valuation and dividends.

Dividends

Banco Bilbao Viscaya Argentaria pays an annual dividend of $1.13 per share and has a dividend yield of 5.1%. Itau Unibanco pays an annual dividend of $0.03 per share and has a dividend yield of 0.4%. Banco Bilbao Viscaya Argentaria pays out 53.8% of its earnings in the form of a dividend. Itau Unibanco pays out 4.1% 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.

Earnings & Valuation

This table compares Banco Bilbao Viscaya Argentaria and Itau Unibanco”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Banco Bilbao Viscaya Argentaria	$40.74 billion	3.11	$11.89 billion	$2.10	10.58
Itau Unibanco	$30.04 billion	2.82	$8.03 billion	$0.73	10.47

Banco Bilbao Viscaya Argentaria has higher revenue and earnings than Itau Unibanco. Itau Unibanco is trading at a lower price-to-earnings ratio than Banco Bilbao Viscaya Argentaria, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Banco Bilbao Viscaya Argentaria has a beta of 0.81, meaning that its share price is 19% less volatile than the S&P 500. Comparatively, Itau Unibanco has a beta of 0.59, meaning that its share price is 41% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Banco Bilbao Viscaya Argentaria and Itau Unibanco, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Banco Bilbao Viscaya Argentaria	0	5	1	0	2.17
Itau Unibanco	0	2	2	0	2.50

Itau Unibanco has a consensus price target of $9.00, suggesting a potential upside of 17.77%. Given Itau Unibanco’s stronger consensus rating and higher possible upside, analysts clearly believe Itau Unibanco is more favorable than Banco Bilbao Viscaya Argentaria.

Profitability

This table compares Banco Bilbao Viscaya Argentaria and Itau Unibanco’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Banco Bilbao Viscaya Argentaria	28.21%	17.65%	1.29%
Itau Unibanco	27.27%	21.27%	1.54%

Insider & Institutional Ownership

3.0% of Banco Bilbao Viscaya Argentaria shares are owned by institutional investors. 0.0% of Banco Bilbao Viscaya Argentaria shares are owned by insiders. Comparatively, 0.6% of Itau Unibanco shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Banco Bilbao Viscaya Argentaria beats Itau Unibanco on 9 of the 16 factors compared between the two stocks.

About Banco Bilbao Viscaya Argentaria

Banco Bilbao Vizcaya Argentaria, S.A. provides retail banking, wholesale banking, and asset management services in the United States, Spain, Mexico, Turkey, South America, and internationally. The company offers savings account, demand deposits, and time deposits; and loan products, such as residential mortgages, other households, credit card loans, loans to enterprises and public sector, as well as consumer finance. It provides insurance and asset management business, including corporate, commercial, SME, payment systems, retail, private and investment banking, pension and life insurance, leasing, factoring, and brokerage. The company provides its products through online and mobile channels. Banco Bilbao Vizcaya Argentaria, S.A. was founded in 1857 and is headquartered in Bilbao, Spain.

About Itau Unibanco

Itaú Unibanco Holding S.A. offers a range of financial products and services to individuals and corporate customers in Brazil and internationally. The company operates through three segments: Retail Banking, Wholesale Banking, and Activities with the Market + Corporation. It offers current account; loans; credit and debit cards; investment and commercial banking services; real estate lending services; financing and investment services; economic, financial and brokerage advisory; and leasing and foreign exchange services. The company also provides property and casualty insurance products covering loss, damage, or liabilities for assets or persons, as well as life insurance products covering death and personal accident. It serves retail customers, account and non-account holders, individuals and legal entities, high income clients, microenterprises, and small companies, as well as middle-market companies and high net worth clients. The company was formerly known as Itaú Unibanco Banco Múltiplo S.A. and changed its name to Itaú Unibanco Holding S.A. in April 2009. The company was incorporated in 1924 and is headquartered in São Paulo, Brazil. Itaú Unibanco Holding S.A. operates as a subsidiary of IUPAR – Itaú Unibanco Participações S.A.