Contrasting Truist Financial (NYSE:TFC) and Shinhan Financial Group (NYSE:SHG)

Shinhan Financial Group (NYSE:SHG) and Truist Financial (NYSE:TFC) are both large-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their earnings, risk, valuation, profitability, dividends, analyst recommendations and institutional ownership.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Shinhan Financial Group and Truist Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Shinhan Financial Group	0	0	1	1	3.50
Truist Financial	2	9	7	0	2.28

Truist Financial has a consensus price target of $53.87, suggesting a potential upside of 11.37%. Given Truist Financial’s higher probable upside, analysts clearly believe Truist Financial is more favorable than Shinhan Financial Group.

Dividends

Shinhan Financial Group pays an annual dividend of $1.71 per share and has a dividend yield of 2.5%. Truist Financial pays an annual dividend of $2.08 per share and has a dividend yield of 4.3%. Shinhan Financial Group pays out 23.0% of its earnings in the form of a dividend. Truist Financial pays out 53.6% 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.

Risk and Volatility

Shinhan Financial Group has a beta of 0.98, indicating that its share price is 2% less volatile than the S&P 500. Comparatively, Truist Financial has a beta of 0.92, indicating that its share price is 8% less volatile than the S&P 500.

Profitability

This table compares Shinhan Financial Group and Truist Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Shinhan Financial Group	15.69%	8.63%	0.66%
Truist Financial	18.01%	10.37%	1.10%

Institutional and Insider Ownership

7.8% of Shinhan Financial Group shares are owned by institutional investors. Comparatively, 71.3% of Truist Financial shares are owned by institutional investors. 1.0% of Shinhan Financial Group shares are owned by insiders. Comparatively, 0.2% of Truist Financial shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Shinhan Financial Group and Truist Financial”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Shinhan Financial Group	$23.83 billion	1.34	$3.48 billion	$7.44	9.12
Truist Financial	$30.44 billion	1.94	$5.31 billion	$3.88	12.47

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

Summary

Truist Financial beats Shinhan Financial Group on 11 of the 17 factors compared between the two stocks.

About Shinhan Financial Group

Shinhan Financial Group Co., Ltd. provides financial products and services in South Korea and internationally. The company operates through six segments: Banking, Credit Card, Securities, Insurance, Credit, and Others. It offers retail banking services, including demand, savings, and fixed deposit-taking; checking accounts; mortgage and home equity, and retail lending; electronic banking and automatic teller machines (ATM); and bill paying, payroll and check-cashing, currency exchange, and wire fund transfer services. The company also provides corporate banking services, such as investment banking, real estate financing, overseas real estate and development project financing, infrastructure and structured financing, equity/venture investments, mergers and acquisitions consulting; securitization and derivatives services comprising securities and derivative products, and foreign exchange trading; business expansion financing and consulting services; and working capital loans and facilities loans. In addition, it is involved in treasury and investment activities in international capital markets consisting of foreign currency-denominated securities trading, foreign exchange trading and services, trade-related financial services, international factoring services, and foreign banking operations. Further, the company offers real estate trust, investment advisory, venture business investment, life and non-life insurance, trust account management, securities brokerage, and asset management services, as well as leasing and equipment financing, savings banking, loan collection and credit reporting, collective investment administration, private equity investment, and financial system development services. Additionally, it provides transaction history inquiries and fund transfers, opening letters of credit, trade finance, payment and collection management, sales and acquisition settlement, business-to-business settlement, sweeping, pooling, ERP interface, host-to-host banking, SWIFT SCORE, and cash and liquidity management service. Shinhan Financial Group Co., Ltd. was founded in 1982 and is headquartered in Seoul, South Korea.

About Truist Financial

Truist Financial Corporation, a financial services company, provides banking and trust services in the Southeastern and Mid-Atlantic United States. The company operates through three segments: Consumer Banking and Wealth, Corporate and Commercial Banking, and Insurance Holdings.Its deposit products include noninterest-bearing checking, interest-bearing checking, savings, and money market deposit accounts, as well as certificates of deposit and individual retirement accounts. The company also provides funding; asset management; automobile lending; credit card lending; consumer finance; home equity and mortgage lending; other direct retail lending; insurance; investment brokerage; mobile/online banking; payment solutions; point-of-sale lending; retail and small business deposit products; small business lending; and wealth management/private banking services. In addition, it offers asset based lending, investment banking and capital market, institutional trust, insurance premium finance, derivatives, commercial lending, international banking, leasing, merchant, commercial deposit and treasury, floor plan, mortgage warehouse lending, real estate lending, and supply chain financing services. Further, the company provides insurance brokerage, retail and wholesale brokerage, securities underwriting and market making, loan syndication, and investment management and advisory services. The company was formerly known as BB&T Corporation and changed its name to Truist Financial Corporation in December 2019. Truist Financial Corporation was founded in 1872 and is headquartered in Charlotte, North Carolina.