Head-To-Head Review: Lloyds Banking Group (LYG) versus BBVA Banco Frances (BFR)

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Lloyds Banking Group (NYSE: BFR) and BBVA Banco Frances (NYSE:BFR) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, earnings, risk, profitability and dividends.

Institutional and Insider Ownership

2.6% of Lloyds Banking Group shares are held by institutional investors. Comparatively, 15.6% of BBVA Banco Frances shares are held by institutional investors. 0.0% of Lloyds Banking Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Risk and Volatility

Lloyds Banking Group has a beta of 0.85, suggesting that its stock price is 15% less volatile than the S&P 500. Comparatively, BBVA Banco Frances has a beta of 0.62, suggesting that its stock price is 38% less volatile than the S&P 500.

Profitability

This table compares Lloyds Banking Group and BBVA Banco Frances’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Lloyds Banking Group 15.05% 15.62% 0.93%
BBVA Banco Frances N/A 21.07% 2.67%

Dividends

Lloyds Banking Group pays an annual dividend of $0.11 per share and has a dividend yield of 3.6%. BBVA Banco Frances pays an annual dividend of $0.21 per share and has a dividend yield of 2.3%. Lloyds Banking Group pays out 20.0% of its earnings in the form of a dividend. BBVA Banco Frances pays out 18.4% 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. Lloyds Banking Group has increased its dividend for 2 consecutive years. Lloyds Banking Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares Lloyds Banking Group and BBVA Banco Frances’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Lloyds Banking Group $50.67 billion 1.08 $4.91 billion $0.55 5.53
BBVA Banco Frances $1.83 billion 1.03 $234.24 million $1.14 8.10

Lloyds Banking Group has higher revenue and earnings than BBVA Banco Frances. Lloyds Banking Group is trading at a lower price-to-earnings ratio than BBVA Banco Frances, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current recommendations for Lloyds Banking Group and BBVA Banco Frances, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Lloyds Banking Group 2 5 5 0 2.25
BBVA Banco Frances 0 1 1 0 2.50

Summary

Lloyds Banking Group beats BBVA Banco Frances on 9 of the 15 factors compared between the two stocks.

Lloyds Banking Group Company Profile

Lloyds Banking Group plc provides banking and financial services under the Lloyds Bank, Halifax, Bank of Scotland, and Scottish Widows brands in the United Kingdom and internationally. The company operates through three segments: Retail, Commercial Banking, and Insurance and Wealth. The Retail segment offers a range of financial service products, including current accounts, savings accounts, mortgages, motor finance, and unsecured consumer lending products to personal and small business customers. The Commercial Banking segment provides lending, transactional banking, working capital management, risk management, term lending, and debt capital markets services for small and medium sized enterprises, corporates, mid-markets, and financial institutions. The Insurance and Wealth segment offers insurance products, such as life, home, motor, and protection insurance; investments comprising pensions and investment products; and wealth management products and services. It also provides credit cards, and personal and business loans; and online and telephone banking services. Lloyds Banking Group plc was founded in 1695 and is headquartered in London, the United Kingdom.

BBVA Banco Frances Company Profile

BBVA Banco Francés S.A., together with its subsidiaries, provides financial services to small and medium enterprises, and individual customers in Spain, Mexico, South America, the United States, Turkey, and rest of Eurasia. The company offers current, checking, and savings accounts, as well as demand and time deposits. It also provides personal and auto loans, and mortgages; loans to the public sector and local financial institutions, and short-term loans to companies, as well as overdraft lines of credit, discounted instruments, real estate mortgage loans, collateral loans, consumer loans, credit card loans, pre-financing and export financing, and short-term placements in foreign banks. In addition, the company offers fire, mixed family and comprehensive, civil liability, theft, personal accidents, umbrella life, debtor balances, funeral services, and other insurance coverage products; investment fund and pension fund management services; and stock exchange brokerage services. Further, it provides financing for the acquisition of new and second-hand Peugeot and Citroën vehicles through pledge loans, receivables from financial leases, and other financial products and in supplying services associated to the purchase, maintenance, and insurance coverage of motor vehicles; and secured loans for the purchase of VW, Audi, and Ducati new or second hand vehicles, credit through operating leases, and other financial products and services, as well as engages in security trading, investment banking, and other authorized operations. As of December 31, 2017, it operated a network of 251 retail branches, 15 in-company branches, 1 points of sale, and 2 point of express support, 797 ATMs, 822 self-service terminals, a telephone banking, and Internet banking services. The company was formerly known as Banco Francés S.A. and changed its name to BBVA Banco Francés S.A. in October 2000. The company was founded in 1886 and is headquartered in Buenos Aires, the Republic of Argentina.

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