Commerzbank (OTCMKTS:CRZBY) & Banco Santander Brasil (NYSE:BSBR) Critical Analysis

Banco Santander Brasil (NYSE:BSBR) and Commerzbank (OTCMKTS:CRZBY) are both large-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their dividends, analyst recommendations, risk, profitability, institutional ownership, valuation and earnings.

Profitability

This table compares Banco Santander Brasil and Commerzbank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Banco Santander Brasil	6.89%	9.65%	0.95%
Commerzbank	11.03%	7.29%	0.45%

Volatility & Risk

Banco Santander Brasil has a beta of 0.61, meaning that its share price is 39% less volatile than the S&P 500. Comparatively, Commerzbank has a beta of 0.36, meaning that its share price is 64% less volatile than the S&P 500.

Dividends

Banco Santander Brasil pays an annual dividend of $0.26 per share and has a dividend yield of 3.8%. Commerzbank pays an annual dividend of $0.52 per share and has a dividend yield of 1.3%. Commerzbank pays out 22.9% of its earnings in the form of a dividend.

Insider & Institutional Ownership

14.5% of Banco Santander Brasil shares are held by institutional investors. 0.1% of Banco Santander Brasil shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Banco Santander Brasil and Commerzbank”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Banco Santander Brasil	$25.44 billion	0.99	$2.48 billion	N/A	N/A
Commerzbank	$25.96 billion	1.71	$2.90 billion	$2.27	18.30

Commerzbank has higher revenue and earnings than Banco Santander Brasil.

Analyst Recommendations

This is a breakdown of current recommendations for Banco Santander Brasil and Commerzbank, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Banco Santander Brasil	1	1	1	0	2.00
Commerzbank	0	4	2	0	2.33

Banco Santander Brasil presently has a consensus price target of $4.70, suggesting a potential downside of 30.68%. Given Banco Santander Brasil’s higher probable upside, research analysts clearly believe Banco Santander Brasil is more favorable than Commerzbank.

Summary

Banco Santander Brasil beats Commerzbank on 8 of the 14 factors compared between the two stocks.

About Banco Santander Brasil

Banco Santander (Brasil) S.A., together with its subsidiaries, provides various banking products and services to individuals, small and medium enterprises, and corporate customers in Brazil and internationally. The company operates through Commercial Banking and Global Wholesale Banking segments. It offers local loans, commercial financing options, development bank funds, and cash management services; export and import financing, guarantees, structuring of asset services. In addition, the company provides financing and advisory services for infrastructure projects and capital markets instruments, as well as offers equity transactions and mergers and acquisitions services. Further, it offers foreign exchange products, derivatives, and investments to institutional investors, corporate clients, and individuals. Additionally, the company provides research services, as well as offers brokerage services for corporate, institutional, and individual investors. Furthermore, it provides deposits and other bank funding instruments, and debit and credit cards. The company provides financial services and products to its customers through multichannel distribution network comprising branches, mini-branches, ATMs, call centers, Internet banking, and mobile banking. Banco Santander (Brasil) S.A. was incorporated in 1985 and is headquartered in São Paulo, Brazil. The company operates as a subsidiary of Banco Santander, S.A.

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.