Shinhan Financial Group (NYSE:SHG) and Huntington Bancshares (NASDAQ:HBAN) are both large-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, profitability, risk, valuation, earnings and analyst recommendations.
Institutional & Insider Ownership
2.8% of Shinhan Financial Group shares are owned by institutional investors. Comparatively, 72.6% of Huntington Bancshares shares are owned by institutional investors. 1.0% of Shinhan Financial Group shares are owned by insiders. Comparatively, 0.7% of Huntington Bancshares shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Analyst Recommendations
This is a summary of recent ratings for Shinhan Financial Group and Huntington Bancshares, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Shinhan Financial Group | 0 | 0 | 2 | 0 | 3.00 |
| Huntington Bancshares | 0 | 10 | 8 | 0 | 2.44 |
Huntington Bancshares has a consensus price target of $11.9559, indicating a potential downside of 13.61%. Given Huntington Bancshares' higher possible upside, analysts clearly believe Huntington Bancshares is more favorable than Shinhan Financial Group.
Profitability
This table compares Shinhan Financial Group and Huntington Bancshares' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Shinhan Financial Group | 17.06% | 8.26% | 0.62% |
| Huntington Bancshares | 15.34% | 7.70% | 0.71% |
Valuation and Earnings
This table compares Shinhan Financial Group and Huntington Bancshares' gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Shinhan Financial Group | $15.19 billion | 1.01 | $2.72 billion | $5.96 | 5.00 |
| Huntington Bancshares | $5.66 billion | 2.49 | $1.41 billion | $1.27 | 10.90 |
Shinhan Financial Group has higher revenue and earnings than Huntington Bancshares. Shinhan Financial Group is trading at a lower price-to-earnings ratio than Huntington Bancshares, indicating that it is currently the more affordable of the two stocks.
Dividends
Shinhan Financial Group pays an annual dividend of $1.16 per share and has a dividend yield of 3.9%. Huntington Bancshares pays an annual dividend of $0.60 per share and has a dividend yield of 4.3%. Shinhan Financial Group pays out 19.5% of its earnings in the form of a dividend. Huntington Bancshares pays out 47.2% 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. Huntington Bancshares has raised its dividend for 1 consecutive years. Huntington Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Risk and Volatility
Shinhan Financial Group has a beta of 0.86, meaning that its share price is 14% less volatile than the S&P 500. Comparatively, Huntington Bancshares has a beta of 1.47, meaning that its share price is 47% more volatile than the S&P 500.
Summary
Huntington Bancshares beats Shinhan Financial Group on 9 of the 17 factors compared between the two stocks.
