Financial Contrast: Banco Santander-Chile (BSAC) and Banco de Chile (BCH)

Banco Santander-Chile (NYSE: BSAC) and Banco de Chile (NYSE:BCH) are both large-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their risk, analyst recommendations, earnings, profitability, institutional ownership, dividends and valuation.

Dividends

Banco Santander-Chile pays an annual dividend of $1.12 per share and has a dividend yield of 3.4%. Banco de Chile pays an annual dividend of $2.37 per share and has a dividend yield of 2.4%. Banco Santander-Chile pays out 57.7% of its earnings in the form of a dividend. Banco de Chile pays out 41.9% 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 de Chile has raised its dividend for 6 consecutive years.

Risk and Volatility

Banco Santander-Chile has a beta of 0.73, meaning that its stock price is 27% less volatile than the S&P 500. Comparatively, Banco de Chile has a beta of 0.44, meaning that its stock price is 56% less volatile than the S&P 500.

Profitability

This table compares Banco Santander-Chile and Banco de Chile’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Banco Santander-Chile 22.58% 19.58% 1.68%
Banco de Chile 24.62% 18.12% 1.77%

Analyst Ratings

This is a summary of current ratings and recommmendations for Banco Santander-Chile and Banco de Chile, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Banco Santander-Chile 2 2 0 0 1.50
Banco de Chile 2 3 1 0 1.83

Banco Santander-Chile presently has a consensus price target of $29.50, indicating a potential downside of 11.57%. Banco de Chile has a consensus price target of $86.33, indicating a potential downside of 10.92%. Given Banco de Chile’s stronger consensus rating and higher possible upside, analysts plainly believe Banco de Chile is more favorable than Banco Santander-Chile.

Insider & Institutional Ownership

16.0% of Banco Santander-Chile shares are held by institutional investors. Comparatively, 1.3% of Banco de Chile shares are held by institutional investors. 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.

Valuation and Earnings

This table compares Banco Santander-Chile and Banco de Chile’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Banco Santander-Chile $4.14 billion 3.80 $844.20 million $1.94 17.20
Banco de Chile $3.84 billion 4.22 $929.56 million $5.65 17.15

Banco de Chile has lower revenue, but higher earnings than Banco Santander-Chile. Banco de Chile is trading at a lower price-to-earnings ratio than Banco Santander-Chile, indicating that it is currently the more affordable of the two stocks.

Summary

Banco de Chile beats Banco Santander-Chile on 10 of the 16 factors compared between the two stocks.

Banco Santander-Chile Company Profile

Banco Santander-Chile provides commercial and retail banking products and services in Chile. It operates through Retail Banking, Middle-Market, and Global Corporate Banking segments. The company offers checking accounts and savings products; consumer, auto, commercial, mortgage, and government-guaranteed loans; credit and debit cards; and Chilean peso and foreign currency denominated loans to finance various commercial transactions, trade, foreign currency forward contracts, and credit lines. It also provides mutual funds, insurance and stock brokerage, foreign exchange, leasing, factoring, financial consulting, investment management, foreign trade and mortgage financing, treasury, and transactional services, as well as specialized services to finance projects for the real estate industry. In addition, the company offers short-term financing and fund raising, brokerage services, derivatives, securitization, and other tailor-made products. It serves individuals, small to middle-sized entities, companies, and large corporations, as well as universities, government entities, and local and regional governments. The company operates 385 branches, which include 276 under the Santander brand name, 51 under the Select brand name, 7 specialized branches for the middle market, and 31 as auxiliary and payment centers, as well as 926 ATMs. Banco Santander-Chile was founded in 1977 and is headquartered in Santiago, Chile.

Banco de Chile Company Profile

Banco de Chile provides various banking products and services to individuals, corporate clients, large companies, and small and medium-sized companies in Chile and internationally. The company operates through four segments: Retail, Wholesale, Treasury, and Subsidiaries. It offers checking accounts; personal, car, and mortgage loans; credit cards; credit lines; and investment products, such as fixed-term, automatic renewal, and tax benefit deposits, as well as stocks, portfolio management, voluntary retirement savings/mutual funds, foreign currency, and fixed income investment products. The company also provides insurance products and trust commissions, as well as financial consultancy services related to mergers and acquisitions, liabilities financing and restructuring, capital contribution, bonds and stocks emissions, and international business. In addition, it offers debt instruments; derivative contracts; and liquidity management, currency trading, foreign exchange transaction, international and treasury banking, securities brokerage, mutual fund and investment management, and securitization services, as well as payment management and collection services. Further, the company provides financing for importers and exporters; and factoring, leasing, express payment, electronic banking, and online payment services. It operates a network of approximately 423 branches and 1,453 ATMs. Banco de Chile was founded in 1855 and is headquartered in Santiago, Chile.

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