Contrasting Intercorp Financial Services (NYSE:IFS) & VersaBank (NASDAQ:VBNK)

VersaBank (NASDAQ:VBNKGet Rating) and Intercorp Financial Services (NYSE:IFSGet Rating) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, dividends, earnings, valuation, institutional ownership, profitability and analyst recommendations.

Dividends

VersaBank pays an annual dividend of $0.08 per share and has a dividend yield of 0.9%. Intercorp Financial Services pays an annual dividend of $1.66 per share and has a dividend yield of 6.4%. VersaBank pays out 10.8% of its earnings in the form of a dividend. Intercorp Financial Services pays out 45.0% 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. Intercorp Financial Services has raised its dividend for 1 consecutive years. Intercorp Financial Services is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

24.3% of VersaBank shares are held by institutional investors. Comparatively, 8.5% of Intercorp Financial Services shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares VersaBank and Intercorp Financial Services’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
VersaBank $75.30 million 3.25 $17.80 million $0.74 12.04
Intercorp Financial Services $1.08 billion 2.76 $461.14 million $3.69 7.01

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

Analyst Ratings

This is a breakdown of recent recommendations and price targets for VersaBank and Intercorp Financial Services, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
VersaBank 0 0 0 1 4.00
Intercorp Financial Services 0 4 1 0 2.20

Intercorp Financial Services has a consensus price target of $31.50, indicating a potential upside of 21.86%. Given Intercorp Financial Services’ higher probable upside, analysts plainly believe Intercorp Financial Services is more favorable than VersaBank.

Profitability

This table compares VersaBank and Intercorp Financial Services’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
VersaBank 23.07% 10.16% 1.28%
Intercorp Financial Services 34.27% 17.44% 1.83%

Summary

Intercorp Financial Services beats VersaBank on 10 of the 16 factors compared between the two stocks.

VersaBank Company Profile (Get Rating)

VersaBank, a schedule I chartered bank, provides various banking products and services in Canada. The company offers deposit products, such as guaranteed investment certificates, registered retirement savings plans, daily interest savings accounts, and tax-free savings accounts, as well as deposit insurance products. It also provides lending services, including point of sale financing that involves purchasing loan and lease receivables from finance companies operating in various industries; and commercial banking services comprising commercial real estate, public sector/infrastructure financing, condominium financing, and residential mortgages. 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.

Intercorp Financial Services Company Profile (Get Rating)

Intercorp Financial Services Inc. provides banking, insurance, and wealth management services for retail and commercial clients in Peru. The company operates through three segments: Banking, Insurance, and Wealth Management. It provides transactional accounts, such as cuenta sueldo and cuenta simple; savings accounts; investment accounts; and time deposits, certificates of deposit, and compensation for service time accounts. The company also offers retail banking products, including credit cards, payroll deduction loans, mortgages, and consumer loans, as well as cash, student, and collateralized cash loans. In addition, the company provides corporate, medium-size business, and small business banking services; and commercial banking products, which include commercial real estate, vehicles, machinery and other goods, cash management, trade finance, and electronic factoring products. Further, it offers treasury and institutional banking, as well as securitization services. Additionally, the company provides annuities and conventional life insurance, and other retail insurance products, as well as financial advisory services for equities, fixed income, structured products, alternative investments, and managed accounts; brokerage, and investment management services. As of December 31, 2021, it operated 189 financial stores and 1,581 ATMs. Intercorp Financial Services Inc. was incorporated in 1897 and is based in Lima, Peru. Intercorp Financial Services Inc. operates as a subsidiary of Intercorp PerĂº Ltd.

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