Itau Unibanco (NYSE:ITUB) & ICICI Bank (NYSE:IBN) Critical Analysis

Itau Unibanco (NYSE:ITUB) and ICICI Bank (NYSE:IBN) are both large-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their earnings, valuation, risk, institutional ownership, dividends, profitability and analyst recommendations.

Earnings & Valuation

This table compares Itau Unibanco and ICICI Bank”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Itau Unibanco	$62.19 billion	1.21	$7.62 billion	$0.71	9.80
ICICI Bank	$22.68 billion	5.17	$6.02 billion	$1.62	20.30

Itau Unibanco has higher revenue and earnings than ICICI Bank. Itau Unibanco is trading at a lower price-to-earnings ratio than ICICI Bank, indicating that it is currently the more affordable of the two stocks.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Itau Unibanco	14.05%	19.48%	1.48%
ICICI Bank	24.81%	15.40%	1.90%

Dividends

Itau Unibanco pays an annual dividend of $0.03 per share and has a dividend yield of 0.4%. ICICI Bank pays an annual dividend of $0.22 per share and has a dividend yield of 0.7%. Itau Unibanco pays out 4.2% of its earnings in the form of a dividend. ICICI Bank pays out 13.6% 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.

Institutional & Insider Ownership

18.2% of ICICI Bank shares are owned by institutional investors. 0.6% of Itau Unibanco shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Risk and Volatility

Itau Unibanco has a beta of 0.74, meaning that its share price is 26% less volatile than the S&P 500. Comparatively, ICICI Bank has a beta of 0.61, meaning that its share price is 39% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Itau Unibanco and ICICI Bank, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Itau Unibanco	0	1	2	1	3.00
ICICI Bank	0	0	0	0	0.00

Itau Unibanco currently has a consensus target price of $6.2727, indicating a potential downside of 9.87%. Given Itau Unibanco’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Itau Unibanco is more favorable than ICICI Bank.

Summary

Itau Unibanco beats ICICI Bank on 10 of the 17 factors compared between the two stocks.

About Itau Unibanco

Itaú Unibanco Holding S.A. offers a range of financial products and services to individuals and corporate customers in Brazil and internationally. The company operates through three segments: Retail Banking, Wholesale Banking, and Activities with the Market + Corporation. It offers current account; loans; credit and debit cards; investment and commercial banking services; real estate lending services; financing and investment services; economic, financial and brokerage advisory; and leasing and foreign exchange services. The company also provides property and casualty insurance products covering loss, damage, or liabilities for assets or persons, as well as life insurance products covering death and personal accident. It serves retail customers, account and non-account holders, individuals and legal entities, high income clients, microenterprises, and small companies, as well as middle-market companies and high net worth clients. The company was formerly known as Itaú Unibanco Banco Múltiplo S.A. and changed its name to Itaú Unibanco Holding S.A. in April 2009. The company was incorporated in 1924 and is headquartered in São Paulo, Brazil. Itaú Unibanco Holding S.A. operates as a subsidiary of IUPAR – Itaú Unibanco Participações S.A.

About ICICI Bank

ICICI Bank Limited provides various banking products and services in India and internationally. It operates through Retail Banking, Wholesale Banking, Treasury, Other Banking, Life Insurance, and Others segments. The company offers savings, salary, pension, current, and other accounts; and time, fixed, recurring, and security deposits services. It also provides home, car, two-wheeler, personal, gold, and commercial business loans, as well as loans against securities and other loans; business loans, including working capital finance, term loans, collateral free loans, loans without financials, finance for importers and exporters, and overdraft facilities, as well as loans for new entities and card swipes; and credit, debit, prepaid, travel, forex, and corporate cards. In addition, the company offers pockets wallet; fixed income products; investment products, such as mutual funds, gold monetization schemes, initial public offerings, and other online investment services; and agri and rural business, farmer finance, tractor loans, and micro banking services, as well as other services to agri corporates. Further, it provides portfolio management, trade, foreign exchange, locker, private and NRI banking, and cash management services; family wealth and demat accounts; commercial and investment banking, capital market, custodial, and institutional banking services; health, personal accident, fire, and motor insurance, as well as distributes general and life insurance products; and Internet, mobile, and phone banking services. Additionally, the company offers securities investment, broking, trading, and underwriting services; and merchant banking, trusteeship, housing finance, pension fund management, asset management, investment advisory, points of presence, and private equity/venture capital fund management services. ICICI Bank Limited was founded in 1955 and is headquartered in Mumbai, India.