Comparing KB Financial Group (KB) and Royal Bank of Scotland Group (RBS)

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

Analyst Recommendations

This is a breakdown of current ratings for KB Financial Group and Royal Bank of Scotland Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
KB Financial Group 0 0 0 0 N/A
Royal Bank of Scotland Group 0 6 7 0 2.54

Volatility & Risk

KB Financial Group has a beta of 1.25, suggesting that its share price is 25% more volatile than the S&P 500. Comparatively, Royal Bank of Scotland Group has a beta of 1.1, suggesting that its share price is 10% more volatile than the S&P 500.

Insider and Institutional Ownership

5.8% of KB Financial Group shares are owned by institutional investors. Comparatively, 0.5% of Royal Bank of Scotland Group shares are owned by institutional investors. 69.0% of KB Financial Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares KB Financial Group and Royal Bank of Scotland Group’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
KB Financial Group $13.29 billion 1.37 $3.10 billion $7.43 6.11
Royal Bank of Scotland Group $19.56 billion 1.94 $1.78 billion $0.65 9.77

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

Profitability

This table compares KB Financial Group and Royal Bank of Scotland Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
KB Financial Group 22.13% 9.81% 0.75%
Royal Bank of Scotland Group 11.77% 7.04% 0.46%

Dividends

KB Financial Group pays an annual dividend of $1.47 per share and has a dividend yield of 3.2%. Royal Bank of Scotland Group does not pay a dividend. KB Financial Group pays out 19.8% of its earnings in the form of a dividend. KB Financial Group has raised its dividend for 2 consecutive years.

Summary

KB Financial Group beats Royal Bank of Scotland Group on 10 of the 15 factors compared between the two stocks.

About KB Financial Group

KB Financial Group Inc., a financial holding company, provides a range of banking and related financial services to consumers and corporations in South Korea and internationally. It operates through Corporate Banking, Retail Banking, Other Banking Services, Securities Business, Non-life Insurance Business, Credit Card Business, and Life Insurance Business segments. The company offers deposit and credit products and services, and other related financial services to large, small, medium-sized enterprises and SOHOs, and individuals and households; and engages in trading in securities and derivatives, funding, and other supporting activities. It also provides investment banking, brokerage, and other supporting services; property and life insurance; and credit sale, cash service, and card loan services. In addition, the company offers foreign exchange transaction; financial investment; credit card and installment finance; security investment trust management and advisory; financial leasing; real estate trust management; capital investment; collection of receivables or credit investigation; software advisory, development, and supply; investment advisory and securities dealing; claim; management; asset-backed securitization; investment trust; trust asset management; and real estate services. KB Financial Group Inc. was founded in 2008 and is headquartered in Seoul, South Korea.

About Royal Bank of Scotland Group

Royal Bank of Scotland Group Plc engages in the provision of international banking and financial services. It operates through the following segments: Personal and Business Banking, Commercial and Private Banking, RBS International (RBSI), NatWest Markets, and Central Items and Other. The Personal and Business Banking segment consists of the United Kingdom Personal, Business Banking, and Ulster Bank RoI sub-segments.The Commercial and Private Banking segment covers the Commercial Banking, Private Banking, and RBS International Commercial Banking sub-segments, involved in serving retail, commercial, corporate, and financial institution customers. The RBSI serves retail, commercial, corporate and financial institution customers in Jersey, Guernsey, Isle of Man and Gibraltar and financial institution customers in Luxembourg and London. The NatWest Markets offers corporate and institutional customers global market access, providing them with trading, risk management, and financing solutions. The Central Items and Other segment includes corporate functions, such as RBS treasury, finance, risk management, compliance, legal, communications, and human resources. The company was founded on March 25, 1968 and is headquartered in Edinburgh, the United Kingdom.

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