Shinhan Financial Group (NYSE: SHG) and Banc of California (NYSE:BANC) are both banks – nec companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, risk, profitability, analyst recommendations, valuation, earnings and dividends.
Insider and Institutional Ownership
2.3% of Shinhan Financial Group shares are held by institutional investors. 1.0% of Shinhan Financial Group shares are held by insiders. Comparatively, 16.9% of Banc of California shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
This is a summary of current ratings and target prices for Shinhan Financial Group and Banc of California, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Shinhan Financial Group||0||0||0||0||N/A|
|Banc of California||0||1||3||0||2.75|
Banc of California has a consensus target price of $23.33, suggesting a potential upside of 9.80%. Given Banc of California’s higher possible upside, analysts plainly believe Banc of California is more favorable than Shinhan Financial Group.
Valuation & Earnings
This table compares Shinhan Financial Group and Banc of California’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Shinhan Financial Group||$11.01 billion||2.02||$2.50 billion||$6.44||7.27|
|Banc of California||$656.85 million||1.64||$115.41 million||$1.14||18.64|
Shinhan Financial Group has higher revenue and earnings than Banc of California. Shinhan Financial Group is trading at a lower price-to-earnings ratio than Banc of California, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Shinhan Financial Group has a beta of 1.05, suggesting that its stock price is 5% more volatile than the S&P 500. Comparatively, Banc of California has a beta of 0.97, suggesting that its stock price is 3% less volatile than the S&P 500.
This table compares Shinhan Financial Group and Banc of California’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Shinhan Financial Group||21.39%||9.91%||0.78%|
|Banc of California||15.48%||11.78%||0.80%|
Banc of California pays an annual dividend of $0.52 per share and has a dividend yield of 2.4%. Shinhan Financial Group does not pay a dividend. Banc of California pays out 45.6% of its earnings in the form of a dividend.
Shinhan Financial Group beats Banc of California on 8 of the 15 factors compared between the two stocks.
Shinhan Financial Group Company Profile
Shinhan Financial Group Co., Ltd. (SFG) is a financial holding company. The Company operates through five segments: commercial banking services, which are provided by Shinhan Bank Co., Ltd. (Shinhan Bank); credit card services, which are provided by Shinhan Card Co., Ltd. (Shinhan Card); securities brokerage services, which are provided by Shinhan Investment Corp. (Shinhan Investment); life insurance services, which are provided by Shinhan Life Insurance Co., Ltd. (Shinhan Life Insurance), and other. The Company’s other services include leasing and equipment financing, regional banking services, savings banking services, loan collection and credit reporting, collective investment administrative services and financial system development services, as well as engaging in private equity investments through formation of private equity funds on a private placement basis. It also offers asset management services, including brokerage and trading of various securities.
Banc of California Company Profile
Banc of California, Inc. is a financial holding company. The Company is the parent of Banc of California, National Association (the Bank). The Company operates through Commercial Banking; Mortgage Banking, and Corporate/Other segments. As of December 31, 2016, the Bank had 90 California banking locations, including 39 full service branches in San Diego, Orange, Santa Barbara, and Los Angeles Counties. The Bank offers automated bill payment, cash and treasury management, master demand accounts, foreign exchange, interest rate swaps, trust services, card payment services, remote and mobile deposit capture, automatic clearing house (ACH) origination, wire transfer, direct deposit, and safe deposit boxes. Bank customers also have the ability to access their accounts through a nationwide network of automated teller machines (ATMs), online, telephone and mobile banking. The Bank’s lending activities are focused on providing financing to private businesses, entrepreneurs and homeowners.
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