Comparing Royal Bank of Scotland Group (NYSE:RBS) and Banco Santander Brasil (NYSE:BSBR)

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Royal Bank of Scotland Group (NYSE:RBS) and Banco Santander Brasil (NYSE:BSBR) are both large-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, profitability, earnings, valuation, analyst recommendations, risk and institutional ownership.

Profitability

This table compares Royal Bank of Scotland Group and Banco Santander Brasil’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Royal Bank of Scotland Group 17.89% 6.04% 0.40%
Banco Santander Brasil 15.45% 14.88% 1.94%

Analyst Ratings

This is a summary of current recommendations and price targets for Royal Bank of Scotland Group and Banco Santander Brasil, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Royal Bank of Scotland Group 2 5 2 0 2.00
Banco Santander Brasil 0 2 1 0 2.33

Banco Santander Brasil has a consensus target price of $12.00, suggesting a potential upside of 7.14%. Given Banco Santander Brasil’s stronger consensus rating and higher probable upside, analysts clearly believe Banco Santander Brasil is more favorable than Royal Bank of Scotland Group.

Valuation and Earnings

This table compares Royal Bank of Scotland Group and Banco Santander Brasil’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Royal Bank of Scotland Group $20.84 billion 1.60 $2.79 billion $0.48 11.54
Banco Santander Brasil $24.16 billion 1.73 $3.44 billion $0.90 12.44

Banco Santander Brasil has higher revenue and earnings than Royal Bank of Scotland Group. Royal Bank of Scotland Group is trading at a lower price-to-earnings ratio than Banco Santander Brasil, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Royal Bank of Scotland Group has a beta of 1.16, suggesting that its stock price is 16% more volatile than the S&P 500. Comparatively, Banco Santander Brasil has a beta of 0.81, suggesting that its stock price is 19% less volatile than the S&P 500.

Insider and Institutional Ownership

0.6% of Royal Bank of Scotland Group shares are held by institutional investors. Comparatively, 1.1% of Banco Santander Brasil shares are held by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

Royal Bank of Scotland Group pays an annual dividend of $0.08 per share and has a dividend yield of 1.4%. Banco Santander Brasil pays an annual dividend of $0.22 per share and has a dividend yield of 2.0%. Royal Bank of Scotland Group pays out 16.7% of its earnings in the form of a dividend. Banco Santander Brasil pays out 24.4% 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.

Summary

Banco Santander Brasil beats Royal Bank of Scotland Group on 11 of the 15 factors compared between the two stocks.

Royal Bank of Scotland Group Company Profile

The Royal Bank of Scotland Group plc, together with its subsidiaries, provides banking and financial products and services to personal, commercial, corporate, and institutional customers worldwide. It operates through Personal & Business Banking, Commercial & Private Banking, RBS International, and NatWest Markets segments. The company also offers wealth management, financial planning, investment management, asset finance, and offshore banking; and financing and risk solutions, as well as trading and flow sales services. The Royal Bank of Scotland Group plc was founded in 1727 and is headquartered in Edinburgh, the United Kingdom.

Banco Santander Brasil Company Profile

Banco Santander (Brasil) S.A. provides commercial banking products and services to individuals, small and medium enterprises, and corporate customers in Brazil and internationally. It operates through two segments, Commercial Banking and Global Wholesale Banking. The company offers checking and savings accounts; priority services, such as withdrawals, debit cards, deposits, and transfers; onshore and offshore financial products and services, investment advice, and asset management services; consumer credit for purchasing motor vehicles, and other goods and services; local loans, commercial finance, trade finance, guarantees, structured loans, and cash management and funding solutions, as well as Banco Nacional de Desenvolvimento Econômico e Social on-lending transfer services; payroll, mortgage, and agribusiness loans, as well as microcredit; investment products; and credit cards and foreign exchange services. It also provides funding and financial advisory services related to projects, and origination and distribution of fixed-income securities in the debt capital markets, as well as financing for acquisitions and syndicated loans, other structured financing arrangements, and subordinated debt and energy efficiency transactions. In addition, the company offers advisory services in mergers and acquisitions, and equity capital markets transactions; stock brokerage and advisory, equity, and equity research services; derivative and investment products; and digital payment solutions. Further, it operates Webmotors, an online automotive classified. The company provides its products and services through branches, mini-branches, and ATMs; call centers; and digital channels, such as Internet banking and mobile banking. Banco Santander (Brasil) S.A. was incorporated in 1985 and is headquartered in São Paulo, Brazil.

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