Svenska Handelsbanken AB (publ) (OTCMKTS:SVNLY – Get Rating) and Shinhan Financial Group (NYSE:SHG – Get Rating) are both large-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, profitability, earnings, risk, institutional ownership, dividends and valuation.
Volatility & Risk
Svenska Handelsbanken AB (publ) has a beta of 0.85, suggesting that its stock price is 15% less volatile than the S&P 500. Comparatively, Shinhan Financial Group has a beta of 0.73, suggesting that its stock price is 27% less volatile than the S&P 500.
This table compares Svenska Handelsbanken AB (publ) and Shinhan Financial Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Svenska Handelsbanken AB (publ)||36.75%||10.90%||0.57%|
|Shinhan Financial Group||21.79%||8.56%||0.64%|
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Svenska Handelsbanken AB (publ)||4||1||5||0||2.10|
|Shinhan Financial Group||0||0||0||0||N/A|
Valuation and Earnings
This table compares Svenska Handelsbanken AB (publ) and Shinhan Financial Group’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Svenska Handelsbanken AB (publ)||$5.80 billion||2.85||$2.28 billion||$0.56||7.46|
|Shinhan Financial Group||$14.57 billion||0.89||$3.62 billion||$6.36||3.99|
Shinhan Financial Group has higher revenue and earnings than Svenska Handelsbanken AB (publ). Shinhan Financial Group is trading at a lower price-to-earnings ratio than Svenska Handelsbanken AB (publ), indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
2.8% of Shinhan Financial Group shares are owned by institutional investors. 1.0% of Shinhan Financial Group shares are owned by insiders. 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.
Svenska Handelsbanken AB (publ) pays an annual dividend of $0.19 per share and has a dividend yield of 4.5%. Shinhan Financial Group pays an annual dividend of $0.91 per share and has a dividend yield of 3.6%. Svenska Handelsbanken AB (publ) pays out 33.9% of its earnings in the form of a dividend. Shinhan Financial Group pays out 14.3% 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.
About Svenska Handelsbanken AB (publ)
Svenska Handelsbanken AB (publ) provides various banking products and services for private and corporate customers primarily in Sweden, the United Kingdom, Norway, the Netherlands, the United States, Luxembourg, China, Germany, France, and Poland. The company offers savings, transactions, business, currency, and investment accounts, as well as accounts for cash pool, and forestry and agriculture; mortgage and committed loans, and private loans; mutual funds; pension products; credit and debit cards; and payment and reconciliation services. It also provides financing for investments, such as equipment, cars, computers, and other inventories, as well as vehicle and real estate financing services; green loans and advisor services; investment and other financing services; medical care, group and health, and travel insurance products; forestry and farming banking products; and online and mobile banking services. In addition, the company offers transaction, trade finance, cash management, risk management, and foreign exchange services, as well as various banking services for children and young people. It operates approximately 214 branches in Sweden, 196 in the Great Britain, 41 in Norway, 42 in Denmark, 27 in Finland, and 28 in the Netherlands. Svenska Handelsbanken AB (publ) was incorporated in 1871 and is headquartered in Stockholm, Sweden.
About Shinhan Financial Group
Shinhan Financial Group Co., Ltd. provides financial products and services in South Korea and internationally. The company operates through six segments: Banking, Credit Card, Securities, Life Insurance, Credit, and Others. It offers retail banking services, including demand, savings, and fixed deposit-taking; checking accounts; mortgage and home equity, and retail lending; electronic banking and automatic teller machines (ATM); and bill paying, payroll and check-cashing, currency exchange, and wire fund transfer services. The company also provides corporate banking services, such as investment banking, real estate financing, overseas real estate and development project financing, infrastructure and structured financing, equity/venture investments, mergers and acquisitions consulting; securitization and derivatives services comprising securities and derivative products, and foreign exchange trading; and working capital loans and facilities loans. In addition, it is involved in treasury and investment activities in international capital markets consisting of foreign currency-denominated securities trading, foreign exchange trading and services, trade-related financial services, international factoring services, and foreign banking operations. Further, the company offers trust account management, securities brokerage, and asset management services, as well as leasing and equipment financing, savings banking, loan collection and credit reporting, collective investment administration, private equity investment, and financial system development services. As of December 31, 2021, it operated a network of 784 service centers; 5,234 ATMs; 7 cash dispensers; and 85 digital kiosks. Shinhan Financial Group Co., Ltd. was founded in 1982 and is headquartered in Seoul, South Korea.
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