Analyzing Banco Macro SA ADR Class B (BMA) & Westpac Banking (WBK)

Banco Macro SA ADR Class B (NYSE: BMA) and Westpac Banking (NYSE:WBK) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, risk, valuation, earnings, profitability and institutional ownership.

Volatility and Risk

Banco Macro SA ADR Class B has a beta of 1.23, indicating that its stock price is 23% more volatile than the S&P 500. Comparatively, Westpac Banking has a beta of 1.33, indicating that its stock price is 33% more volatile than the S&P 500.

Dividends

Banco Macro SA ADR Class B pays an annual dividend of $2.23 per share and has a dividend yield of 3.5%. Westpac Banking pays an annual dividend of $1.40 per share and has a dividend yield of 6.8%. Banco Macro SA ADR Class B pays out 25.8% of its earnings in the form of a dividend. Westpac Banking pays out 80.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Recommendations

This is a breakdown of current ratings for Banco Macro SA ADR Class B and Westpac Banking, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Banco Macro SA ADR Class B 0 1 5 0 2.83
Westpac Banking 2 3 3 0 2.13

Banco Macro SA ADR Class B presently has a consensus target price of $108.85, indicating a potential upside of 68.60%. Given Banco Macro SA ADR Class B’s stronger consensus rating and higher possible upside, analysts plainly believe Banco Macro SA ADR Class B is more favorable than Westpac Banking.

Profitability

This table compares Banco Macro SA ADR Class B and Westpac Banking’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Banco Macro SA ADR Class B 24.73% 25.82% 5.20%
Westpac Banking N/A N/A N/A

Insider and Institutional Ownership

28.3% of Banco Macro SA ADR Class B shares are held by institutional investors. Comparatively, 0.6% of Westpac Banking shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Banco Macro SA ADR Class B and Westpac Banking’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Banco Macro SA ADR Class B $2.21 billion 1.92 $567.08 million $8.65 7.46
Westpac Banking $28.58 billion 2.42 $6.09 billion $1.75 11.81

Westpac Banking has higher revenue and earnings than Banco Macro SA ADR Class B. Banco Macro SA ADR Class B is trading at a lower price-to-earnings ratio than Westpac Banking, indicating that it is currently the more affordable of the two stocks.

Summary

Banco Macro SA ADR Class B beats Westpac Banking on 9 of the 14 factors compared between the two stocks.

About Banco Macro SA ADR Class B

Banco Macro S.A. provides various banking products and services to individuals and corporate customers in Argentina. It offers various retail products and services, such as savings and checking accounts, time deposits, credit and debit cards, consumer finance loans, mortgage loans, automobile loans, overdrafts, credit-related services, home and car insurance coverage, tax collection, utility payments, automated teller machines (ATMs), and money transfers. The company also provides personal loans, document discounts, mortgages, overdrafts, pledged loans, and credit card loans to retail customers. In addition, it offers corporate banking products and services that include deposits, lending, check cashing advances and factoring, guaranteed loans, credit lines for financing foreign trade, and cash management services. Further, the company provides trust, payroll, and financial agency services, as well as corporate credit cards and other specialty products; transaction services, such as collection services, payments to suppliers, payroll services, foreign exchange transactions, and foreign trade services; and information services, such as Datanet and Interpymes services to corporate customers. As of December 31, 2016, it operated through a network of 444 branches, 1,395 ATMs, 920 self-service terminals, and service points. Banco Macro S.A. also offers Internet banking services. The company was incorporated in 1988 and is headquartered in Buenos Aires, Argentina.

About Westpac Banking

Westpac Banking Corporation provides various banking and financial services in Australia, New Zealand, Asia, the Pacific region, and internationally. It operates through five divisions: Consumer Bank, Business Bank, BT Financial Group, Westpac Institutional Bank, and Westpac New Zealand. It offers everyday banking, savings, term deposit, moving to Australia, under 21 and student, business, community solutions one, not-for-profit savings, and foreign currency accounts; term, tailor-made, and farm management deposits; debit, credit, and travel money cards; home, personal, investment, small business, and commercial loans; and equipment, automotive, cash flow, property, and insurance premium financing services. It also provides home and content, landlord, car, travel, boat, caravan and trailer, life, credit card and loan repayment, income protection, business, farm pack, person income, and business overheads insurance products; superannuation and retirement products; investment portfolios; installment warrants; and trading, financial advisory, wealth, foreign currency exchange, international payment, cash flow management, international trade, and import and export services. In addition, it offers industry specific banking and treasury services; other services, such as emergency cash, online and telephone banking, ATMs, unclaimed money, travel center, margin lending, and banking services to migrants moving to Australia; and mobile wallets. Further, it provides capital advisory and fund management, transactional and private banking, and financial market services; and corporate and structured finance, as well as trade and supply chain finance. It serves individuals; micro, small, and medium enterprises; and commercial, corporate, institutional, and government customers. The company was formerly known as Bank of New South Wales and changed its name to Westpac Banking Corporation in October 1982. The company was founded in 1817 and is headquartered in Sydney, Australia.

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