Reviewing Svenska Handelsbanken Ab Publ (OTCMKTS:SVNLY) and Itau Unibanco (NYSE:ITUB)

Svenska Handelsbanken Ab Publ (OTCMKTS:SVNLY) and Itau Unibanco (NYSE:ITUB) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, institutional ownership, dividends, profitability, valuation and analyst recommendations.

Dividends

Svenska Handelsbanken Ab Publ pays an annual dividend of $0.60 per share and has a dividend yield of 7.6%. Itau Unibanco pays an annual dividend of $0.03 per share and has a dividend yield of 0.4%. Svenska Handelsbanken Ab Publ pays out 98.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Itau Unibanco pays out 4.3% of its earnings in the form of a dividend.

Valuation and Earnings

This table compares Svenska Handelsbanken Ab Publ and Itau Unibanco”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Svenska Handelsbanken Ab Publ	$17.44 billion	N/A	$2.60 billion	$0.61	12.90
Itau Unibanco	$62.19 billion	1.49	$7.62 billion	$0.70	11.97

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

Analyst Ratings

This is a summary of recent recommendations for Svenska Handelsbanken Ab Publ and Itau Unibanco, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Svenska Handelsbanken Ab Publ	2	5	0	0	1.71
Itau Unibanco	0	1	2	1	3.00

Itau Unibanco has a consensus target price of $7.77, suggesting a potential downside of 7.32%. Given Itau Unibanco’s stronger consensus rating and higher probable upside, analysts clearly believe Itau Unibanco is more favorable than Svenska Handelsbanken Ab Publ.

Volatility and Risk

Svenska Handelsbanken Ab Publ has a beta of 0.57, meaning that its stock price is 43% less volatile than the S&P 500. Comparatively, Itau Unibanco has a beta of 0.65, meaning that its stock price is 35% less volatile than the S&P 500.

Profitability

This table compares Svenska Handelsbanken Ab Publ and Itau Unibanco’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Svenska Handelsbanken Ab Publ	15.97%	12.80%	0.68%
Itau Unibanco	16.30%	19.60%	1.49%

Summary

Itau Unibanco beats Svenska Handelsbanken Ab Publ on 12 of the 14 factors compared between the two stocks.

About Svenska Handelsbanken Ab Publ

Svenska Handelsbanken AB (publ) provides various banking products and services for private and corporate customers primarily in Sweden, the United Kingdom, Norway, the Netherlands, the United States, Luxembourg, Finland, and Poland. The company offers savings, transactions, business, currency, and investment accounts, as well as accounts for cash pool, and forestry and agriculture; mortgage and committed loans, and private loans; mutual funds; pension products; credit and debit cards; and payment and reconciliation services, as well as foreign exchange rate services. It also provides financing for investments, such as equipment, cars, computers, and other inventories, as well as vehicle and real estate financing services; green loans and advisor services; investment and other financing services; medical care, and group and health insurance products; forestry and farming banking products; and online and mobile banking services, as well as various banking services for children and young people. In addition, the company offers financial services, that includes asset management, transactional banking, corporate finance, financing, markets, trade finance, market information and research services to large corporations; cash management solutions; and various corporate banking services to small and medium-sized companies and large corporates, as well as private banking services. Svenska Handelsbanken AB (publ) was incorporated in 1871 and is headquartered in Stockholm, Sweden.

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.