Critical Review: Royal Bank Scotland PLC (The) (RBS) versus Its Peers

Royal Bank Scotland PLC (The) (NYSE: RBS) is one of 330 publicly-traded companies in the “Banks” industry, but how does it compare to its competitors? We will compare Royal Bank Scotland PLC (The) to similar businesses based on the strength of its earnings, dividends, institutional ownership, risk, valuation, profitability and analyst recommendations.

Profitability

This table compares Royal Bank Scotland PLC (The) and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Royal Bank Scotland PLC (The) -23.27% 6.92% 0.44%
Royal Bank Scotland PLC (The) Competitors 18.87% 8.84% 0.94%

Institutional and Insider Ownership

0.5% of Royal Bank Scotland PLC (The) shares are held by institutional investors. Comparatively, 52.4% of shares of all “Banks” companies are held by institutional investors. 10.5% of shares of all “Banks” companies are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk and Volatility

Royal Bank Scotland PLC (The) has a beta of 1.04, suggesting that its stock price is 4% more volatile than the S&P 500. Comparatively, Royal Bank Scotland PLC (The)’s competitors have a beta of 0.78, suggesting that their average stock price is 22% less volatile than the S&P 500.

Valuation & Earnings

This table compares Royal Bank Scotland PLC (The) and its competitors revenue, earnings per share (EPS) and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Royal Bank Scotland PLC (The) $17.52 billion N/A -10.46
Royal Bank Scotland PLC (The) Competitors N/A N/A 19.76

Royal Bank Scotland PLC (The) is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Royal Bank Scotland PLC (The) and its competitors, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Royal Bank Scotland PLC (The) 1 10 6 0 2.29
Royal Bank Scotland PLC (The) Competitors 2073 8225 8340 323 2.36

As a group, “Banks” companies have a potential downside of 8.06%. Given Royal Bank Scotland PLC (The)’s competitors stronger consensus rating and higher probable upside, analysts plainly believe Royal Bank Scotland PLC (The) has less favorable growth aspects than its competitors.

Summary

Royal Bank Scotland PLC (The) competitors beat Royal Bank Scotland PLC (The) on 10 of the 12 factors compared.

About Royal Bank Scotland PLC (The)

The Royal Bank of Scotland Group plc (RBS) is a banking and financial services company. The Company provides a range of products and services to personal, commercial, corporate and institutional customers, through its subsidiaries, The Royal Bank of Scotland plc and National Westminster Bank Plc (NatWest), as well as through other brands, including Ulster Bank and Coutts. The Company’s segments include Personal & Business Banking (PBB), Commercial & Private Banking (CPB), NatWest Markets (NWM), Capital Resolution, Williams & Glyn (W&G), and Central items & other. The Company’s products and services include banking and risk management, such as payments, insurance and liquidity management; personal lending, including personal loans and credit cards; deposits, such as current accounts and savings accounts; investments, such as portfolio management and unitized funds; commercial lending, including business lending, and capital markets, including rates, currencies and financing.

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