Financial Analysis: National Bank of Canada (NTIOF) versus Banco Bilbao Vizcaya Argentaria (BBVA)

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National Bank of Canada (NYSE: BBVA) and Banco Bilbao Vizcaya Argentaria (NYSE:BBVA) are both large-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, risk, earnings, valuation, analyst recommendations, institutional ownership and profitability.

Insider & Institutional Ownership

0.1% of National Bank of Canada shares are owned by institutional investors. Comparatively, 3.1% of Banco Bilbao Vizcaya Argentaria shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Earnings and Valuation

This table compares National Bank of Canada and Banco Bilbao Vizcaya Argentaria’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
National Bank of Canada $6.85 billion 2.49 $1.48 billion $4.17 12.10
Banco Bilbao Vizcaya Argentaria $28.55 billion 1.43 $3.98 billion $0.73 8.52

Banco Bilbao Vizcaya Argentaria has higher revenue and earnings than National Bank of Canada. Banco Bilbao Vizcaya Argentaria is trading at a lower price-to-earnings ratio than National Bank of Canada, indicating that it is currently the more affordable of the two stocks.

Dividends

National Bank of Canada pays an annual dividend of $1.91 per share and has a dividend yield of 3.8%. Banco Bilbao Vizcaya Argentaria pays an annual dividend of $0.30 per share and has a dividend yield of 4.8%. National Bank of Canada pays out 45.8% of its earnings in the form of a dividend. Banco Bilbao Vizcaya Argentaria pays out 41.1% 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. Banco Bilbao Vizcaya Argentaria has increased its dividend for 6 consecutive years. Banco Bilbao Vizcaya Argentaria is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

National Bank of Canada has a beta of 1.32, indicating that its stock price is 32% more volatile than the S&P 500. Comparatively, Banco Bilbao Vizcaya Argentaria has a beta of 0.99, indicating that its stock price is 1% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for National Bank of Canada and Banco Bilbao Vizcaya Argentaria, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
National Bank of Canada 0 1 0 0 2.00
Banco Bilbao Vizcaya Argentaria 0 3 1 0 2.25

Banco Bilbao Vizcaya Argentaria has a consensus price target of $7.79, suggesting a potential upside of 25.24%. Given Banco Bilbao Vizcaya Argentaria’s stronger consensus rating and higher probable upside, analysts plainly believe Banco Bilbao Vizcaya Argentaria is more favorable than National Bank of Canada.

Profitability

This table compares National Bank of Canada and Banco Bilbao Vizcaya Argentaria’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
National Bank of Canada 20.94% 18.59% 0.87%
Banco Bilbao Vizcaya Argentaria 13.76% 7.57% 0.58%

Summary

Banco Bilbao Vizcaya Argentaria beats National Bank of Canada on 9 of the 16 factors compared between the two stocks.

About National Bank of Canada

National Bank of Canada provides various financial products and services to retail, commercial, corporate, and institutional clients in Canada and internationally. It operates through Personal and Commercial, Wealth Management, Financial Markets, and U.S. Specialty Finance and International segments. The Personal and Commercial segment offers personal banking services, including transaction solutions, mortgage loans and home equity lines of credit, consumer loans, payment solutions, savings options, and tailored investment solutions; various insurance products; and commercial banking services, such as credit, and deposit and investment solutions, as well as international trade, foreign exchange transactions, payroll, cash management, insurance, electronic transactions, and complementary services. The Wealth Management segment provides investment solutions, trust services, banking services, lending services, and other wealth management solutions through internal and third-party distribution networks. The Financial Markets segment offers debt and equity underwriting; bank credit and risk management products and services; advisory services in the areas of mergers and acquisitions, and financing; and investment banking services comprising origination, underwriting, distribution, and liquidity services through secondary market activities, as well as macroeconomic and issuer-focused research services. The U.S. Specialty Finance and International segments provides specialty finance expertise; financial products and services to individuals and businesses in Cambodia; and the activities of targeted investments in certain emerging markets. The company provides its services through a network of 429 branches and 931 banking machines. The company was founded in 1859 and is headquartered in Montreal, Canada.

About Banco Bilbao Vizcaya Argentaria

Banco Bilbao Vizcaya Argentaria, S.A., together with its subsidiaries, provides retail and wholesale banking, asset management, and private banking services. The company accepts various deposits, such as current and savings accounts, fixed-term deposits, subordinated deposits, and other accounts. It also offers loan products; and foreclosed real-estate assets from residential mortgages and developers, as well as lending to developers. The company also offers credit cards; and corporate and business banking, corporate and investment banking, and insurance. It operates in Spain, Mexico, South America, the United States, Turkey, Asia-Pacific, and rest of Europe. Banco Bilbao Vizcaya Argentaria, S.A. was founded in 1857 and is headquartered in Madrid, Spain.

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