Financial Comparison: Nordea Bank (OTCMKTS:NRDBY) versus UBS Group (NYSE:UBS)

Nordea Bank (OTCMKTS:NRDBY) and UBS Group (NYSE:UBS) are both large-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, earnings, analyst recommendations, risk, profitability and valuation.

Profitability

This table compares Nordea Bank and UBS Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nordea Bank	22.65%	15.15%	0.74%
UBS Group	12.66%	10.05%	0.55%

Dividends

Nordea Bank pays an annual dividend of $0.50 per share and has a dividend yield of 2.7%. UBS Group pays an annual dividend of $0.36 per share and has a dividend yield of 0.8%. Nordea Bank pays out 31.4% of its earnings in the form of a dividend. UBS Group pays out 12.9% 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. UBS Group has increased its dividend for 5 consecutive years.

Risk and Volatility

Nordea Bank has a beta of 0.64, meaning that its stock price is 36% less volatile than the S&P 500. Comparatively, UBS Group has a beta of 1.19, meaning that its stock price is 19% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and target prices for Nordea Bank and UBS Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nordea Bank	1	3	2	1	2.43
UBS Group	1	6	5	0	2.33

UBS Group has a consensus price target of $60.30, suggesting a potential upside of 30.30%. Given UBS Group’s higher possible upside, analysts clearly believe UBS Group is more favorable than Nordea Bank.

Institutional & Insider Ownership

0.0% of Nordea Bank shares are owned by institutional investors. 1.0% of UBS Group shares are owned by insiders. 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.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nordea Bank	$23.46 billion	2.65	$5.48 billion	$1.59	11.47
UBS Group	$76.12 billion	1.90	$7.77 billion	$2.79	16.59

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

Summary

UBS Group beats Nordea Bank on 10 of the 18 factors compared between the two stocks.

About Nordea Bank

Nordea Bank Abp offers banking products and services in Sweden, Finland, Norway, Denmark, and internationally. It operates through Personal Banking, Business Banking, Large Corporates & Institutions, and Asset & Wealth Management segments. The Personal Banking segment provides various financial services to customers through mobile banking, over the phone, online meetings, and branch offices. The Business Banking segment offers payments, cash management, cards, working capital management, and cards and finance solutions to corporate and personal customers. The Large Corporates & Institutions segment provides financing, cash management and payment, investment banking, capital market products, and securities services to corporate and institutional customers. The Asset & Wealth Management segment offers investment, savings, and risk management solutions to high net worth individuals and institutional investors. It also offers account-based products, such as lending and deposit; project finance services, asset-based financing through leasing, hire purchase, and factoring, as well as sales to finance partners, such as dealers, vendors, and retailers; financial instruments or arrangement for financial instruments, including currencies, commodities, stocks, and bonds; and asset management, including investment funds, discretionary management, portfolio advice, equity trading, and pension accounts, as well as life insurance and pension products and services. Nordea Bank Abp was founded in 1820 and is headquartered in Helsinki, Finland.

About UBS Group

UBS Group AG provides financial advice and solutions to private, institutional, and corporate clients worldwide. It operates through five divisions: Global Wealth Management, Personal & Corporate Banking, Asset Management, Investment Bank, and Non-core and Legacy. The company offers investment advice, estate and wealth planning, investing, corporate and banking, and investment management, as well as mortgage, securities-based, and structured lending solutions. It also provides personal banking products and services, such as deposits, credit and debit cards, and online and mobile banking, as well as lending, investments, retirement, and wealth management services; and corporate and institutional solutions, including equity and debt capital markets, syndicated and structured credit, private placements, leasing, traditional financing, and transaction banking solutions for payment and cash management services, trade and export finance, and global custody solutions. In addition, the company offers equities, fixed income, hedge funds, real estate and private markets, indexed and alternative beta strategies, asset allocation and currency investment strategies, customized multi-asset solutions, advisory and fiduciary services, and multi-manager hedge fund solutions and advisory services. Further, it advises clients on strategic business opportunities and helps them raise capital to fund their activities; enables its clients to buy, sell, and finance securities on capital markets and to manage their risks and liquidity; distributes, trades in, finances, and clears cash equities and equity-linked products; structures, originates, and distributes new equity and equity-linked issues; and originates, distributes, manages risk, and provides liquidity in foreign exchange, rates, credit and precious metals. The company was formerly known as UBS AG and changed its name to UBS Group AG in December 2014. UBS Group AG was founded in 1862 and is headquartered in Zurich, Switzerland.