Popular (NASDAQ: BPOP) and Credicorp (NYSE:BAP) are both mid-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, profitability, analyst recommendations, institutional ownership, earnings, valuation and dividends.

Volatility & Risk

Popular has a beta of 1.33, suggesting that its share price is 33% more volatile than the S&P 500. Comparatively, Credicorp has a beta of 0.84, suggesting that its share price is 16% less volatile than the S&P 500.

Institutional and Insider Ownership

84.8% of Popular shares are owned by institutional investors. Comparatively, 66.3% of Credicorp shares are owned by institutional investors. 1.3% of Popular shares are owned by company insiders. Comparatively, 15.9% of Credicorp shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and recommmendations for Popular and Credicorp, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Popular 1 3 5 0 2.44
Credicorp 0 3 2 0 2.40

Popular presently has a consensus price target of $47.10, suggesting a potential upside of 33.65%. Credicorp has a consensus price target of $222.00, suggesting a potential upside of 4.68%. Given Popular’s stronger consensus rating and higher probable upside, equities analysts clearly believe Popular is more favorable than Credicorp.

Valuation & Earnings

This table compares Popular and Credicorp’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Popular $1.93 billion 1.86 $216.69 million $1.97 17.89
Credicorp $4.39 billion 3.84 $1.04 billion $13.76 15.41

Credicorp has higher revenue and earnings than Popular. Credicorp is trading at a lower price-to-earnings ratio than Popular, indicating that it is currently the more affordable of the two stocks.

Dividends

Popular pays an annual dividend of $1.00 per share and has a dividend yield of 2.8%. Credicorp pays an annual dividend of $3.74 per share and has a dividend yield of 1.8%. Popular pays out 50.8% of its earnings in the form of a dividend. Credicorp pays out 27.2% 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. Popular has increased its dividend for 2 consecutive years. Popular is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Popular and Credicorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Popular 9.98% 5.70% 0.73%
Credicorp 25.34% 18.66% 2.43%

Summary

Credicorp beats Popular on 10 of the 17 factors compared between the two stocks.

Popular Company Profile

Popular, Inc. (Popular) is a financial holding company. The Company operates in two segments: Banco Popular de Puerto Rico (BPPR), which includes its Puerto Rico business, and Banco Popular North America (BPNA), which includes its the United States mainland business. The Company has operations in Puerto Rico, the United States and the Caribbean. The Company’s BPPR segment provides retail, mortgage and commercial banking services through its banking subsidiary, Banco Popular de Puerto Rico, as well as auto and equipment leasing and financing, investment banking, broker-dealer and insurance services through specialized subsidiaries. The Company’s BPNA segment consists of Popular North America, Inc. (PNA) functioning as the holding company for its operations in the United States. It also operates PNA’s subsidiary, E-LOAN, Inc. The banking operations of BPNA in the United States mainland are based in New York, Florida and New Jersey, conducted under the name of Popular Community Bank.

Credicorp Company Profile

Credicorp Ltd. is a financial services holding company in Peru. The Company has four operating segments based on its products and services, which include banking, insurance, pension funds and investment banking. Its operating subsidiaries include Banco de Credito del Peru; Atlantic Security Bank, which it holds through Atlantic Security Holding Corporation; El Pacifico-Peruano Suiza Compania de Seguros y Reaseguros (Grupo Pacifico); Prima AFP S.A., and Credicorp Capital Ltd. (Credicorp Capital). Its banking business is focused on commercial and consumer loans, credit facilities, deposits, current accounts and credit cards. The Company conducts its insurance business through Grupo Pacifico. It conducts all of its pension fund activities through its private pension fund administrator Prima AFP S.A. The investment banking business units are grouped under Credicorp Capital, which carries its business under asset management, sales and trading, and corporate finance business lines.

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