Critical Survey: Banco De Chile (NYSE:BCH) vs. Intesa Sanpaolo (OTCMKTS:ISNPY)

Intesa Sanpaolo (OTCMKTS:ISNPY) and Banco De Chile (NYSE:BCH) are both large-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, risk, profitability and valuation.

Risk and Volatility

Intesa Sanpaolo has a beta of 0.75, suggesting that its share price is 25% less volatile than the S&P 500. Comparatively, Banco De Chile has a beta of 0.23, suggesting that its share price is 77% less volatile than the S&P 500.

Valuation & Earnings

This table compares Intesa Sanpaolo and Banco De Chile”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Intesa Sanpaolo	$48.17 billion	2.42	$9.38 billion	$3.36	11.94
Banco De Chile	$4.21 billion	4.65	$1.37 billion	$2.80	13.84

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

Profitability

This table compares Intesa Sanpaolo and Banco De Chile’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Intesa Sanpaolo	22.67%	13.57%	0.97%
Banco De Chile	32.87%	23.25%	2.52%

Dividends

Intesa Sanpaolo pays an annual dividend of $1.87 per share and has a dividend yield of 4.7%. Banco De Chile pays an annual dividend of $1.57 per share and has a dividend yield of 4.1%. Intesa Sanpaolo pays out 55.7% of its earnings in the form of a dividend. Banco De Chile pays out 56.1% 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. Intesa Sanpaolo is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Intesa Sanpaolo and Banco De Chile, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Intesa Sanpaolo	0	4	2	1	2.57
Banco De Chile	0	3	0	1	2.50

Banco De Chile has a consensus target price of $34.00, indicating a potential downside of 12.24%. Given Banco De Chile’s higher possible upside, analysts clearly believe Banco De Chile is more favorable than Intesa Sanpaolo.

Institutional and Insider Ownership

1.2% of Intesa Sanpaolo shares are owned by institutional investors. Comparatively, 1.2% of Banco De Chile shares are owned by institutional investors. 5.9% of Banco De Chile shares are owned by company 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.

About Intesa Sanpaolo

Intesa Sanpaolo S.p.A. provides various financial products and services primarily in Italy. It operates through six segments: Banca dei Territori, IMI Corporate & Investment Banking, International Subsidiary Banks, Asset Management, Private Banking, and Insurance. The company offers lending and deposit products; private and commercial banking, corporate and transaction banking, structured finance, investment banking, public finance, and capital markets; industrial credit, leasing, and factoring; asset management; life and non-life insurance and pension products; asset and wealth management; private investments; and bancassurance products. The company serves individuals, small and medium-sized businesses, non-profit customers, corporates and financial institutions, public administration, private clients and high net worth individuals, institutional clientele, and other customers. Intesa Sanpaolo S.p.A. was founded in 1998 and is headquartered in Turin, Italy.

About Banco De Chile

Banco de Chile, together with its subsidiaries, provides various banking services to customers in Chile. The company offers checking and debit accounts, debit and credit cards, and lines of credit; mortgage, consume, commercial, general purpose mortgage loans, and finance leases; and factoring services, mutual fund management, stock brokerage, foreign trade, payments and collections, insurance brokerage, including life and general insurance, as well as time deposits, savings instruments, and foreign currency services through branches under the Banco de Chile and Banco Edwards brands. It also provides working capital loans, corporate credit cards, foreign currency brokerage, leasing and long-term syndicated loans, advisory services for mergers acquisitions and debt restructuring; cash management services, including payment and collection services; and international fund transfer networks, current account and deposit products, fund administration, and treasury management. In addition, the company offers insurance brokerage, derivative contracts, transactional banking, financial risks coverage, representation and asset custody, investment banking and management, capital markets products, foreign exchange transactions; and advisory services for initial public offerings, capital increases, sales and purchases of blocks of shares, private capital placements, public share tenders, company valuations, bond issuances, and syndicated loans services. Further, it provides foreign exchange brokerage, forward contracts, interest rate swaps, repurchase agreements, and other investment products based on bonds, mortgage bonds and deposits. The company serves individuals, small and medium-sized companies, corporate clients, and large companies, real estate and construction, and high net worth family office customers. Banco de Chile was founded in 1893 and is headquartered in Santiago, Chile.