Shinhan Financial Group (NYSE:SHG) versus Commerzbank (OTCMKTS:CRZBY) Head-To-Head Comparison

Commerzbank (OTCMKTS:CRZBY) and Shinhan Financial Group (NYSE:SHG) are both large-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, risk, valuation, earnings, profitability, institutional ownership and dividends.

Insider and Institutional Ownership

7.8% of Shinhan Financial Group shares are held by institutional investors. 1.0% of Shinhan Financial Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Commerzbank and Shinhan Financial Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Commerzbank	11.03%	7.29%	0.45%
Shinhan Financial Group	22.38%	12.45%	0.98%

Earnings and Valuation

This table compares Commerzbank and Shinhan Financial Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Commerzbank	$25.96 billion	1.93	$2.90 billion	$2.27	18.67
Shinhan Financial Group	$24.56 billion	1.07	$3.12 billion	$10.27	5.25

Shinhan Financial Group has lower revenue, but higher earnings than Commerzbank. Shinhan Financial Group is trading at a lower price-to-earnings ratio than Commerzbank, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Commerzbank and Shinhan Financial Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Commerzbank	0	4	2	0	2.33
Shinhan Financial Group	1	0	1	0	2.00

Risk & Volatility

Commerzbank has a beta of 0.36, indicating that its stock price is 64% less volatile than the S&P 500. Comparatively, Shinhan Financial Group has a beta of 1.01, indicating that its stock price is 1% more volatile than the S&P 500.

Dividends

Commerzbank pays an annual dividend of $0.52 per share and has a dividend yield of 1.2%. Shinhan Financial Group pays an annual dividend of $1.20 per share and has a dividend yield of 2.2%. Commerzbank pays out 22.9% of its earnings in the form of a dividend. Shinhan Financial Group pays out 11.7% 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. Shinhan Financial Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Shinhan Financial Group beats Commerzbank on 10 of the 15 factors compared between the two stocks.

About Commerzbank

Commerzbank AG provides banking and capital market products and services to private and small business customers, corporate, financial service providers, and institutional clients in Germany, rest of Europe, the Americas, Asia, and internationally. It operates through two segments, Private and Small-Business Customers, and Corporate Clients. The company offers saving, checking, business, and current accounts; term deposits; pension; credit and debit cards; payment solutions; overdraft services; various loans; and insurance products. It also provides trade securities; treasury management; corporate financing; real estate financing; financing advisory; merger and acquisition; foreign trade; trade financing; asset and risk management; and online banking, as well as wealth management services. Commerzbank AG was founded in 1870 and is headquartered in Frankfurt am Main, Germany.

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, 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; business expansion financing and consulting services; 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 real estate trust, investment advisory, venture business investment, life and non-life insurance, 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. Additionally, it provides transaction history inquiries and fund transfers, opening letters of credit, trade finance, payment and collection management, sales and acquisition settlement, business-to-business settlement, sweeping, pooling, ERP interface, host-to-host banking, SWIFT SCORE, and cash and liquidity management service. Shinhan Financial Group Co., Ltd. was founded in 1982 and is headquartered in Seoul, South Korea.