Comparing First Republic Bank (FRC) & GRUPO AVAL ACCI/S (AVAL)

First Republic Bank (NYSE:FRC) and GRUPO AVAL ACCI/S (NYSE:AVAL) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, profitability, valuation, dividends, analyst recommendations and risk.

Insider & Institutional Ownership

21.6% of GRUPO AVAL ACCI/S shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current recommendations for First Republic Bank and GRUPO AVAL ACCI/S, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Republic Bank 0 9 5 0 2.36
GRUPO AVAL ACCI/S 0 2 0 0 2.00

First Republic Bank presently has a consensus target price of $102.46, suggesting a potential upside of 14.00%. GRUPO AVAL ACCI/S has a consensus target price of $9.00, suggesting a potential upside of 24.14%. Given GRUPO AVAL ACCI/S’s higher probable upside, analysts clearly believe GRUPO AVAL ACCI/S is more favorable than First Republic Bank.

Profitability

This table compares First Republic Bank and GRUPO AVAL ACCI/S’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
First Republic Bank 24.05% 11.47% 0.89%
GRUPO AVAL ACCI/S 9.22% 8.56% 0.92%

Valuation & Earnings

This table compares First Republic Bank and GRUPO AVAL ACCI/S’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First Republic Bank $2.91 billion 4.87 $757.66 million $4.31 20.85
GRUPO AVAL ACCI/S $7.02 billion 0.36 $657.60 million $0.60 12.08

First Republic Bank has higher earnings, but lower revenue than GRUPO AVAL ACCI/S. GRUPO AVAL ACCI/S is trading at a lower price-to-earnings ratio than First Republic Bank, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

First Republic Bank has a beta of 0.84, indicating that its stock price is 16% less volatile than the S&P 500. Comparatively, GRUPO AVAL ACCI/S has a beta of 0.55, indicating that its stock price is 45% less volatile than the S&P 500.

Dividends

First Republic Bank pays an annual dividend of $0.72 per share and has a dividend yield of 0.8%. GRUPO AVAL ACCI/S pays an annual dividend of $0.32 per share and has a dividend yield of 4.4%. First Republic Bank pays out 16.7% of its earnings in the form of a dividend. GRUPO AVAL ACCI/S pays out 53.3% 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. First Republic Bank has increased its dividend for 5 consecutive years.

Summary

First Republic Bank beats GRUPO AVAL ACCI/S on 11 of the 16 factors compared between the two stocks.

First Republic Bank Company Profile

First Republic Bank, together with its subsidiaries, provides private banking, private business banking, real estate lending, and wealth management services to clients in metropolitan areas of the United States. It operates through two segments, Commercial Banking and Wealth Management. The company offers deposit products, such as checking, money market checking, savings, and passbook deposits, as well as certificates of deposit. It also provides a range of lending products that comprise residential mortgage loans, home equity lines of credit, multifamily loans, commercial real estate loans, residential construction loans, personal loans, business loans, and smaller loans and lines of credit to businesses and individuals. The company's loans are secured by single family residences, multifamily buildings, and commercial real estate properties. In addition, it provides wealth management services, which include various investment strategies and products, trust and custody services, full service and online brokerage, financial and estate planning, and access to alternative investments, as well as investing, insurance, and foreign exchange services. As of December 31, 2017, the company offered its services through 76 offices, including 70 preferred banking licensed deposit-taking offices in San Francisco, Palo Alto, Los Angeles, Santa Barbara, Newport Beach, and San Diego, California; Portland, Oregon; Boston, Massachusetts; Palm Beach, Florida; Greenwich, Connecticut; and New York, New York, as well as 6 offices that provided lending, wealth management, and trust services. First Republic Bank was founded in 1985 and is headquartered in San Francisco, California.

GRUPO AVAL ACCI/S Company Profile

Grupo Aval Acciones y Valores S.A. provides a range of financial services and products to public and private sector customers in Colombia and Central America. The company's deposit products and services include checking accounts, savings accounts, and time deposits, as well as other deposits consisting of deposits from correspondent accounts, cashier checks, and collection services. It also provides loan products, such as commercial loans that comprise general purpose loans, working capital loans, loans funded by development banks, corporate credit cards, and overdraft loans; consumer loans comprising personal loans, automobile and other vehicle loans, credit cards, overdrafts, loans funded by development banks, and general purpose loans; microcredit loans; and mortgage loans. In addition, the company offers pension and severance fund management services; and trust, bonded warehousing and brokerage transactions, real estate escrow, merchandise and document storage and deposit, customs agency, cargo management, surety bond and merchandise distribution, bancassurance, and payment and collection services, as well as engages in deposit and lending operations in foreign currencies. Further, it is involved in merchant and investment banking activities; trading activities that include fixed income trading, and derivatives and foreign exchange operations, as well as the provision of treasury, pension plan administration, investment fund advice, financial advisory, leasing, private banking, and insurance services. As of December 31, 2017, the company operated through a network of 1,421 branches and 3,781 ATMs in Colombia; and 350 branches and 1,993 ATMs in Central America. Grupo Aval Acciones y Valores S.A. was founded in 1994 and is based in Bogotá, Colombia.

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