Analyzing Wells Fargo & Company (NYSE:WFC) and Credicorp (NYSE:BAP)

Credicorp (NYSE:BAP) and Wells Fargo & Company (NYSE:WFC) are both large-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, profitability, institutional ownership, dividends, earnings, valuation and risk.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Credicorp and Wells Fargo & Company, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Credicorp	0	3	4	0	2.57
Wells Fargo & Company	0	10	14	2	2.69

Credicorp currently has a consensus price target of $418.40, indicating a potential upside of 10.75%. Wells Fargo & Company has a consensus price target of $98.61, indicating a potential upside of 9.06%. Given Credicorp’s higher possible upside, equities analysts plainly believe Credicorp is more favorable than Wells Fargo & Company.

Dividends

Credicorp pays an annual dividend of $14.48 per share and has a dividend yield of 3.8%. Wells Fargo & Company pays an annual dividend of $2.00 per share and has a dividend yield of 2.2%. Credicorp pays out 53.6% of its earnings in the form of a dividend. Wells Fargo & Company pays out 29.1% 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. Credicorp has increased its dividend for 3 consecutive years and Wells Fargo & Company has increased its dividend for 4 consecutive years.

Profitability

This table compares Credicorp and Wells Fargo & Company’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Credicorp	25.04%	20.52%	2.87%
Wells Fargo & Company	17.55%	13.85%	1.06%

Volatility and Risk

Credicorp has a beta of 0.88, meaning that its share price is 12% less volatile than the S&P 500. Comparatively, Wells Fargo & Company has a beta of 0.92, meaning that its share price is 8% less volatile than the S&P 500.

Institutional and Insider Ownership

89.8% of Credicorp shares are held by institutional investors. Comparatively, 75.9% of Wells Fargo & Company shares are held by institutional investors. 15.9% of Credicorp shares are held by insiders. Comparatively, 0.1% of Wells Fargo & Company shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Credicorp and Wells Fargo & Company”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Credicorp	$8.01 billion	4.45	$1.94 billion	$26.99	14.00
Wells Fargo & Company	$123.53 billion	2.21	$21.34 billion	$6.88	13.14

Wells Fargo & Company has higher revenue and earnings than Credicorp. Wells Fargo & Company is trading at a lower price-to-earnings ratio than Credicorp, indicating that it is currently the more affordable of the two stocks.

Summary

Credicorp beats Wells Fargo & Company on 10 of the 18 factors compared between the two stocks.

About Credicorp

Credicorp Ltd. provides various financial, insurance, and health services and products primarily in Peru and internationally. It operates through Universal Banking, Insurance and Pensions, Microfinance, and Investment Banking and Equity Management segments. The Universal Banking segment grants various credits and financial instruments to individuals and legal entities; and various deposits and current accounts. The Insurance and Pensions segment issues insurance policies to cover losses in commercial property, transport, marine vessels, automobiles, life, health, and pensions; and management services for private pension funds. The Microfinance segment provides management of loans, deposits, and current accounts for small and microenterprises. The Investment Banking and Equity Management segment is involved in provision of brokerage and investment management services for corporations, institutional investors, governments, and foundations; structuring and placement of issues in the primary market; execution and negotiation of transactions in the secondary market; and structuring of securitization processes for corporate customers and manages mutual funds. The company was founded in 1889 and is headquartered in Lima, Peru.

About Wells Fargo & Company

Wells Fargo & Co. is a diversified and community-based financial services company, which engages in the provision of banking, insurance, investments, mortgage, and consumer and commercial finance products and services. It operates through the following segments: Consumer Banking and Lending, Commercial Banking, Corporate and Investment Banking, and Wealth and Investment Management. The Consumer Banking and Lending segment offers consumer and small business banking, home lending, credit cards, auto, and personal lending. The Commercial Banking segment provides banking and credit products across industry sectors and municipalities, secured lending and lease products, and treasury management. The Corporate and Investment Banking segment is composed of corporate banking, investment banking, treasury management, commercial real estate lending and servicing, and equity and fixed income solutions, as well as sales, trading, and research capabilities. The Wealth and Investment Management segment refers to personalized wealth management, brokerage, financial planning, lending, private banking, trust, and fiduciary products and services. The company was founded by Henry Wells and William G. Fargo on March 18, 1852 and is headquartered in San Francisco, CA.