Bank of Montreal (NYSE:BMO) and Banco Santander (Brasil) (NYSE:BSBR) are both large-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, profitability, analyst recommendations, valuation, risk, dividends and institutional ownership.
Institutional & Insider Ownership
39.2% of Bank of Montreal shares are owned by institutional investors. Comparatively, 0.7% of Banco Santander (Brasil) shares are owned by institutional investors. 1.0% of Bank of Montreal shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Risk and Volatility
Bank of Montreal has a beta of 1.29, meaning that its stock price is 29% more volatile than the S&P 500. Comparatively, Banco Santander (Brasil) has a beta of 1.03, meaning that its stock price is 3% more volatile than the S&P 500.
Valuation & Earnings
This table compares Bank of Montreal and Banco Santander (Brasil)'s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Bank of Montreal | $25.68 billion | 2.31 | $3.79 billion | $5.73 | 16.02 |
| Banco Santander (Brasil) | $22.66 billion | 1.16 | $4.16 billion | $1.05 | 6.67 |
Banco Santander (Brasil) has lower revenue, but higher earnings than Bank of Montreal. Banco Santander (Brasil) is trading at a lower price-to-earnings ratio than Bank of Montreal, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a breakdown of recent ratings and recommmendations for Bank of Montreal and Banco Santander (Brasil), as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Bank of Montreal | 1 | 2 | 7 | 0 | 2.60 |
| Banco Santander (Brasil) | 1 | 1 | 0 | 0 | 1.50 |
Bank of Montreal currently has a consensus target price of $100.0714, indicating a potential upside of 9.03%. Given Bank of Montreal's stronger consensus rating and higher probable upside, analysts clearly believe Bank of Montreal is more favorable than Banco Santander (Brasil).
Profitability
This table compares Bank of Montreal and Banco Santander (Brasil)'s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Bank of Montreal | 14.82% | 10.69% | 0.55% |
| Banco Santander (Brasil) | 18.90% | 15.40% | 1.86% |
Dividends
Bank of Montreal pays an annual dividend of $3.33 per share and has a dividend yield of 3.6%. Banco Santander (Brasil) pays an annual dividend of $0.10 per share and has a dividend yield of 1.4%. Bank of Montreal pays out 58.1% of its earnings in the form of a dividend. Banco Santander (Brasil) pays out 9.5% 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. Bank of Montreal has increased its dividend for 1 consecutive years. Bank of Montreal is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Summary
Bank of Montreal beats Banco Santander (Brasil) on 12 of the 17 factors compared between the two stocks.
