Reviewing Bank Hapoalim (OTCMKTS:BKHYY) and Lloyds Banking Group (NYSE:LYG)

Bank Hapoalim (OTCMKTS:BKHYY) and Lloyds Banking Group (NYSE:LYG) are both large-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, earnings, valuation, institutional ownership, risk and dividends.

Analyst Ratings

This is a summary of current recommendations and price targets for Bank Hapoalim and Lloyds Banking Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bank Hapoalim	0	1	0	0	2.00
Lloyds Banking Group	0	4	5	1	2.70

Valuation & Earnings

This table compares Bank Hapoalim and Lloyds Banking Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bank Hapoalim	$10.95 billion	2.67	$2.08 billion	$9.89	11.23
Lloyds Banking Group	$19.38 billion	3.94	$5.65 billion	$0.35	14.76

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

Profitability

This table compares Bank Hapoalim and Lloyds Banking Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bank Hapoalim	21.60%	15.12%	1.24%
Lloyds Banking Group	18.04%	8.38%	0.42%

Dividends

Bank Hapoalim pays an annual dividend of $3.74 per share and has a dividend yield of 3.4%. Lloyds Banking Group pays an annual dividend of $0.12 per share and has a dividend yield of 2.3%. Bank Hapoalim pays out 37.8% of its earnings in the form of a dividend. Lloyds Banking Group pays out 34.3% 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.

Insider & Institutional Ownership

2.2% of Lloyds Banking Group shares are held by institutional investors. 0.0% of Lloyds Banking Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Volatility and Risk

Bank Hapoalim has a beta of 1.16, suggesting that its share price is 16% more volatile than the S&P 500. Comparatively, Lloyds Banking Group has a beta of 0.9, suggesting that its share price is 10% less volatile than the S&P 500.

Summary

Lloyds Banking Group beats Bank Hapoalim on 10 of the 16 factors compared between the two stocks.

About Bank Hapoalim

Bank Hapoalim B.M., together with its subsidiaries, provides various banking and financial products and services in Israel and internationally. It operates through Household, Private Banking, Small businesses and micro businesses, Mid-sized businesses, Large businesses, Institutional entities, and Financial management segments. The company offers account-management services, lending for various purposes, deposits, and savings plans, and capital-market service; housing loans; research and advisory services; and pension advisory and retirement planning services. It also provides products and services for the expansion of a business, advanced digital services, and a service center specializing in businesses; credit for routine operations and investment financing, guarantees, letters of credit, foreign trade, and transactions in financial and derivative instruments, as well as investment services in various channels, such as foreign currency, shekels, and securities. In addition, the company offers financial services, including foreign-trade financing, financing of working capital, financing of assets overseas, complex financing transactions, syndication, and credit-risk transfers; and financing of construction projects, granting credit to customers, and issuing guarantees to buyers of homes. Further, it provides managers of mutual funds, managers of investment portfolios, and managers of provident funds, study funds, and pension funds; trading activities; underwriting services; and brokerage and custody services. The company serves households, private-banking customers, foreign residents, small businesses, financial-asset managers, middle-market business clients, and large corporations. Bank Hapoalim B.M. was founded in 1921 and is based in Tel Aviv, Israel.

About Lloyds Banking Group

Lloyds Banking Group plc, together with its subsidiaries, provides a range of banking and financial services in the United Kingdom and internationally. It operates in three segments: Retail; Commercial Banking; and Insurance, Pensions and Investments. The Retail segment offers a range of financial service products, including current accounts, savings, mortgages, motor finance, unsecured loans, leasing solutions, and credit cards to personal customers. The Commercial Banking segment provides lending, transactional banking, working capital management, risk management, and debt financing services to small and medium-sized entities, corporates, and institutions. The Insurance, Pensions, and Investments segment offers insurance, investment, and pension management products and services. It also provides digital banking services. The company offers its products and services under the Lloyds Bank, Halifax, Bank of Scotland, Scottish Widows, MBNA, Schroders Personal Wealth, Black Horse, Lex Autolease, Birmingham Midshires, LDC, AMC, Embark Group, Citra, IWeb, Cavendish Online, and Tusker brand names. Lloyds Banking Group plc was founded in 1695 and is headquartered in London, the United Kingdom.