Banco Do Brasil (OTCMKTS:BDORY) & VersaBank (NASDAQ:VBNK) Head-To-Head Analysis

Banco Do Brasil (OTCMKTS:BDORY) and VersaBank (NASDAQ:VBNK) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, valuation, dividends, profitability, risk, analyst recommendations and institutional ownership.

Insider and Institutional Ownership

0.0% of Banco Do Brasil shares are held by institutional investors. Comparatively, 56.9% of VersaBank shares are held by institutional investors. 5.3% of VersaBank shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Risk and Volatility

Banco Do Brasil has a beta of 0.41, indicating that its share price is 59% less volatile than the S&P 500. Comparatively, VersaBank has a beta of 1.1, indicating that its share price is 10% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Banco Do Brasil	3.34%	8.86%	0.67%
VersaBank	9.34%	8.32%	0.75%

Valuation and Earnings

This table compares Banco Do Brasil and VersaBank”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Banco Do Brasil	$66.83 billion	0.34	$2.45 billion	$0.41	9.59
VersaBank	$217.14 million	2.86	$20.32 million	$0.69	27.94

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

Dividends

Banco Do Brasil pays an annual dividend of $0.03 per share and has a dividend yield of 0.8%. VersaBank pays an annual dividend of $0.07 per share and has a dividend yield of 0.4%. Banco Do Brasil pays out 7.3% of its earnings in the form of a dividend. VersaBank pays out 10.1% 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. Banco Do Brasil is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a summary of recent ratings and target prices for Banco Do Brasil and VersaBank, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Banco Do Brasil	1	2	0	0	1.67
VersaBank	0	3	0	0	2.00

VersaBank has a consensus price target of $20.00, indicating a potential upside of 3.73%. Given VersaBank’s stronger consensus rating and higher possible upside, analysts plainly believe VersaBank is more favorable than Banco Do Brasil.

Summary

VersaBank beats Banco Do Brasil on 10 of the 15 factors compared between the two stocks.

About Banco Do Brasil

Banco do Brasil S.A. provides banking products and services for individuals, companies, and public sectors in Brazil and internationally. The company's Banking segment offers various products and services, including deposits, loans, and services to retail, wholesale, and public sector markets, as well as to micro-entrepreneurs and the low income population. Its Investments segment engages in the intermediation and distribution of debts in the primary and secondary markets; equity investment activities; and rendering of financial services. The company's Fund Management segment is involved in the purchase, sale, and custody of securities, as well as the management of portfolios, and investment funds and clubs. Its Insurance, Pension and Capitalization segment provides life, property, and automobile insurance products, as well as private pension and capitalization plans. The company's Payment Methods segment is involved in the funding, transmission, processing, and settlement of transactions through electronic means. Its Other segment engages in the provision of credit recovery and consortium administration services; development, manufacturing, leasing, and integration of digital electronic systems and equipment, peripherals, programs, inputs, and computing supplies; intermediation of air tickets; and lodging and organization of events. Banco do Brasil S.A. was founded in 1808 and is headquartered in Brasa­lia, Brazil.

About VersaBank

VersaBank provides various banking products and services in Canada and the United States. It offers deposit products, such as web-based chequing accounts, guaranteed investment certificates, registered retirement savings plans, and tax-free savings accounts, as well as deposit insurance products. The company also provides lending services, including point of sale financing that covers purchasing loan and lease receivables from finance companies operating in various industries; commercial banking services comprising commercial real estate, public sector/infrastructure financing, and condominium financing; and residential mortgages. In addition, it offers cybersecurity services. The company was formerly known as Pacific & Western Bank of Canada and changed its name to VersaBank in May 2016. VersaBank was incorporated in 1979 and is headquartered in London, Canada.