Financial Review: Banco Bradesco (NYSE:BBDO) and Banco Latinoamericano de Comercio Exterior (NYSE:BLX)

Banco Bradesco (NYSE:BBDO) and Banco Latinoamericano de Comercio Exterior (NYSE:BLX) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, institutional ownership, profitability, analyst recommendations, risk, valuation and dividends.

Valuation & Earnings

This table compares Banco Bradesco and Banco Latinoamericano de Comercio Exterior”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Banco Bradesco	$37.55 billion	0.79	$3.20 billion	$0.35	8.01
Banco Latinoamericano de Comercio Exterior	$829.46 million	2.04	$205.87 million	$5.97	7.60

Banco Bradesco has higher revenue and earnings than Banco Latinoamericano de Comercio Exterior. Banco Latinoamericano de Comercio Exterior is trading at a lower price-to-earnings ratio than Banco Bradesco, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

19.5% of Banco Latinoamericano de Comercio Exterior shares are held by institutional investors. 0.3% of Banco Bradesco shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

Banco Bradesco pays an annual dividend of $0.03 per share and has a dividend yield of 1.1%. Banco Latinoamericano de Comercio Exterior pays an annual dividend of $2.50 per share and has a dividend yield of 5.5%. Banco Bradesco pays out 8.6% of its earnings in the form of a dividend. Banco Latinoamericano de Comercio Exterior pays out 41.9% 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 Latinoamericano de Comercio Exterior has increased its dividend for 2 consecutive years. Banco Latinoamericano de Comercio Exterior is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

Banco Bradesco has a beta of 0.82, indicating that its stock price is 18% less volatile than the S&P 500. Comparatively, Banco Latinoamericano de Comercio Exterior has a beta of 0.89, indicating that its stock price is 11% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and recommmendations for Banco Bradesco and Banco Latinoamericano de Comercio Exterior, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Banco Bradesco	0	1	0	0	2.00
Banco Latinoamericano de Comercio Exterior	0	0	1	0	3.00

Profitability

This table compares Banco Bradesco and Banco Latinoamericano de Comercio Exterior’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Banco Bradesco	9.76%	12.96%	1.07%
Banco Latinoamericano de Comercio Exterior	26.32%	16.23%	1.82%

Summary

Banco Latinoamericano de Comercio Exterior beats Banco Bradesco on 11 of the 16 factors compared between the two stocks.

About Banco Bradesco

Banco Bradesco S.A., together with its subsidiaries, provides various banking products and services to individuals, corporates, and businesses in Brazil and internationally. The company operates through two segments, Banking and Insurance. It provides current, savings, click, and salary accounts; real estate credit, vehicle financing, payroll loans, mortgage loans, microcredit, leasing, and personal and installment credit; overdraft and agribusiness loans; debit and business cards; financial and security services; consortium products; car, personal accident, dental, travel, and life insurance; investment products; pension products; foreign currency exchange services; capitalization bonds; and internet banking services. Banco Bradesco S.A. was founded in 1943 and is headquartered in Osasco, Brazil.

About Banco Latinoamericano de Comercio Exterior

Banco Latinoamericano de Comercio Exterior, S. A., a multinational bank, primarily engages in the financing of foreign trade in Latin America and the Caribbean. The company operates in two segments, Commercial and Treasury. It offers bilateral loans; structured loans including syndicated and clubbed, such as acquisition and pre-export financing, A/B loan financing, bridge loans, and liability management; and project financing. The company also provides letter of credit comprising import and export letters of credit, and credit discounting and financing, as well as usance payable at sight; stand-by services; bank guarantees, including first demand and local guarantees; import and export documentary collection; irrevocable reimbursement undertaking; and canal tolls. In addition, it offers liquidity and investment solutions, such as time deposits, DDA accounts, Yankee certificate of deposits, and EMTN private placement services, as well as supply chain finance services. The company primarily serves financial institutions, corporations, and sovereigns and state-owned entities. Banco Latinoamericano de Comercio Exterior, S. A.was formerly known as Banco Latinoamericano de Exportaciones, S.A. and changed its name to Banco Latinoamericano de Comercio Exterior, S. A. in June 2009. The company was founded in 1975 and is headquartered in Panama City, the Republic of Panama.