Critical Analysis: National Bank (NBHC) & Itau Corpbanca (ITCB)

National Bank (NYSE: NBHC) and Itau Corpbanca (NYSE:ITCB) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, earnings, valuation, institutional ownership, risk and dividends.

Profitability

This table compares National Bank and Itau Corpbanca’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
National Bank 17.13% 6.40% 0.74%
Itau Corpbanca 4.76% 2.26% 0.27%

Volatility and Risk

National Bank has a beta of 0.66, suggesting that its share price is 34% less volatile than the S&P 500. Comparatively, Itau Corpbanca has a beta of 1, suggesting that its share price has a similar volatility profile to the S&P 500.

Valuation & Earnings

This table compares National Bank and Itau Corpbanca’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
National Bank $200.48 million 4.61 $23.06 million $1.25 27.54
Itau Corpbanca $2.27 billion 1.46 $18.72 million N/A N/A

National Bank has higher earnings, but lower revenue than Itau Corpbanca.

Dividends

National Bank pays an annual dividend of $0.36 per share and has a dividend yield of 1.0%. Itau Corpbanca does not pay a dividend. National Bank pays out 28.8% of its earnings in the form of a dividend. National Bank has increased its dividend for 2 consecutive years.

Analyst Ratings

This is a summary of current recommendations and price targets for National Bank and Itau Corpbanca, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
National Bank 0 5 1 0 2.17
Itau Corpbanca 0 1 0 0 2.00

National Bank presently has a consensus target price of $35.40, suggesting a potential upside of 2.85%. Given National Bank’s stronger consensus rating and higher probable upside, analysts clearly believe National Bank is more favorable than Itau Corpbanca.

Insider & Institutional Ownership

95.6% of National Bank shares are held by institutional investors. Comparatively, 0.7% of Itau Corpbanca shares are held by institutional investors. 7.6% of National Bank shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

National Bank beats Itau Corpbanca on 12 of the 15 factors compared between the two stocks.

National Bank Company Profile

National Bank Holdings Corporation (NBH) is a bank holding company. Through Bank Midwest, N.A. (Bank Midwest), NBH’s primary business is to offer a range of products and financial services to both its commercial and consumer customers, located in Kansas, Missouri and Colorado. The Company offers an array of lending products to cater to the customers’ needs, including, but not limited to, small business loans, equipment loans, term loans, asset-backed loans, letters of credit, commercial lines of credit, residential mortgage loans, home equity and consumer loans. It also offers traditional depository products, including commercial and consumer checking accounts, non-interest-bearing demand accounts, money market deposit accounts, savings accounts and time deposit accounts and cash management services. As of December 31, 2011, it operated a network of 103 full-service banking centers, with the majority of those banking centers located in the Kansas City region and Colorado.

Itau Corpbanca Company Profile

Itau Corpbanca is a Chile-based financial institution (the Bank) engaged in the banking sector. The Bank operates in seven segments: Large, Corporate and Real Estate Companies, which includes companies that belong to major economic groups and specific industries; Companies, which includes leasing, factoring and other financial services for business customers; Traditional and Private Banking, which offers checking accounts, consumer loans, credit cards and mortgage loans; Lower Income Retail Banking, corresponding to operations of Banco Condell, which offers consumer loans, credit cards and mortgage loans; Treasury and International, which comprises treasury activities, such as financial management and funding; Non-Banking Financial Services, which provides services rendered by its subsidiaries, including insurance brokerage, financial advisory and securities brokerage, and Colombia, which includes commercial and retail banking services provided by CorpBanca Colombia and Helm Bank.

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