Analyzing Shinhan Financial Group (NYSE:SHG) and Hang Seng Bank (OTCMKTS:HSNGY)

Shinhan Financial Group (NYSE:SHG) and Hang Seng Bank (OTCMKTS:HSNGY) are both large-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, earnings, risk, dividends, valuation, analyst recommendations and profitability.

Institutional & Insider Ownership

7.8% of Shinhan Financial Group shares are held by institutional investors. 1.0% of Shinhan Financial Group shares are held by insiders. Comparatively, 0.2% of Hang Seng Bank shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations for Shinhan Financial Group and Hang Seng Bank, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Shinhan Financial Group	0	0	1	1	3.50
Hang Seng Bank	1	1	0	0	1.50

Dividends

Shinhan Financial Group pays an annual dividend of $1.86 per share and has a dividend yield of 2.8%. Hang Seng Bank pays an annual dividend of $0.58 per share and has a dividend yield of 2.9%. Shinhan Financial Group pays out 20.6% of its earnings in the form of a dividend.

Valuation and Earnings

This table compares Shinhan Financial Group and Hang Seng Bank”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Shinhan Financial Group	$23.83 billion	1.33	$3.48 billion	$9.01	7.42
Hang Seng Bank	$8.63 billion	4.27	$2.36 billion	N/A	N/A

Shinhan Financial Group has higher revenue and earnings than Hang Seng Bank.

Profitability

This table compares Shinhan Financial Group and Hang Seng Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Shinhan Financial Group	19.89%	10.87%	0.85%
Hang Seng Bank	N/A	N/A	N/A

Risk and Volatility

Shinhan Financial Group has a beta of 0.96, suggesting that its stock price is 4% less volatile than the S&P 500. Comparatively, Hang Seng Bank has a beta of 0.17, suggesting that its stock price is 83% less volatile than the S&P 500.

Summary

Shinhan Financial Group beats Hang Seng Bank on 11 of the 14 factors compared between the two stocks.

About Shinhan Financial Group

Shinhan Financial Group Co., Ltd. provides financial products and services in South Korea and internationally. The company operates through six segments: Banking, Credit Card, Securities, Insurance, Credit, and Others. It offers retail banking services, including demand, savings, and fixed deposit-taking; checking accounts; mortgage and home equity, and retail lending; electronic banking and automatic teller machines (ATM); and bill paying, payroll and check-cashing, currency exchange, and wire fund transfer services. The company also provides corporate banking services, such as investment banking, real estate financing, overseas real estate and development project financing, infrastructure and structured financing, equity/venture investments, mergers and acquisitions consulting; securitization and derivatives services comprising securities and derivative products, and foreign exchange trading; business expansion financing and consulting services; and working capital loans and facilities loans. In addition, it is involved in treasury and investment activities in international capital markets consisting of foreign currency-denominated securities trading, foreign exchange trading and services, trade-related financial services, international factoring services, and foreign banking operations. Further, the company offers real estate trust, investment advisory, venture business investment, life and non-life insurance, trust account management, securities brokerage, and asset management services, as well as leasing and equipment financing, savings banking, loan collection and credit reporting, collective investment administration, private equity investment, and financial system development services. Additionally, it provides transaction history inquiries and fund transfers, opening letters of credit, trade finance, payment and collection management, sales and acquisition settlement, business-to-business settlement, sweeping, pooling, ERP interface, host-to-host banking, SWIFT SCORE, and cash and liquidity management service. Shinhan Financial Group Co., Ltd. was founded in 1982 and is headquartered in Seoul, South Korea.

About Hang Seng Bank

Hang Seng Bank Limited, together with its subsidiaries, provides various banking and related financial services to individual, corporate, commercial, small and medium-sized enterprises, and institutional customers in Hong Kong, the Mainland of China, and internationally. It operates through five segments: Wealth and Personal Banking, Commercial Banking, Global Banking, Global Markets, and Other. The company offers personal banking services, including current and savings accounts, time deposits, mortgages and personal loans, credit cards, and insurance, investment, and other wealth management services, as well as consumer lending and wealth management services. It also provides corporate lending, trade and receivable finance, payments and cash management, treasury and foreign exchange, general insurance, key-person insurance, investment services, and corporate wealth management services; general banking and transaction banking, corporate lending, deposits, and cash management services; and tailored solutions and services in foreign exchange, bullion, equities, fixed income, and securities financing, as well as manages the funding and liquidity position activities. In addition, the company offers retirement benefits, life assurance, fund management, and stock broking services, as well as index compilation and licensing; fund raising and sales; and asset management services. It operates service outlets in Hong Kong; branches in Macau and Singapore; and representative office in Taipei, as well as a network of outlets in the Mainland of China. The company was founded in 1933 and is headquartered in Central, Hong Kong. Hang Seng Bank Limited operates as a subsidiary of The Hongkong and Shanghai Banking Corporation Limited.