Financial Analysis: Danske Bank (OTCMKTS:DNKEY) vs. DNB Bank ASA (OTCMKTS:DNBBY)

Danske Bank (OTCMKTS:DNKEY) and DNB Bank ASA (OTCMKTS:DNBBY) are both large-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, institutional ownership, earnings, valuation, dividends, analyst recommendations and risk.

Profitability

This table compares Danske Bank and DNB Bank ASA’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Danske Bank	40.52%	13.25%	0.62%
DNB Bank ASA	21.06%	14.63%	1.11%

Volatility & Risk

Danske Bank has a beta of 0.61, suggesting that its stock price is 39% less volatile than the S&P 500. Comparatively, DNB Bank ASA has a beta of 0.68, suggesting that its stock price is 32% less volatile than the S&P 500.

Dividends

Danske Bank pays an annual dividend of $1.24 per share and has a dividend yield of 4.9%. DNB Bank ASA pays an annual dividend of $1.39 per share and has a dividend yield of 4.7%. Danske Bank pays out 58.8% of its earnings in the form of a dividend. DNB Bank ASA pays out 50.2% 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.

Earnings and Valuation

This table compares Danske Bank and DNB Bank ASA”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Danske Bank	$8.61 billion	4.92	$3.49 billion	$2.11	12.03
DNB Bank ASA	$19.14 billion	2.42	$4.20 billion	$2.77	10.77

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

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Danske Bank and DNB Bank ASA, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Danske Bank	0	2	4	0	2.67
DNB Bank ASA	1	4	2	1	2.38

Summary

DNB Bank ASA beats Danske Bank on 8 of the 14 factors compared between the two stocks.

About Danske Bank

Danske Bank A/S provides various banking products and services to corporate, institutional, and international clients. The company offers insurance and pension products, mortgage finance and real-estate brokerage services, asset management and trading services in fixed income products, foreign exchange services, and equities. It also provides advisory services to personal and private banking customers; and business advisory services, including acquisition, change of ownership, strategic development, or international expansion. In addition, the company offers financing, risk management, investment, and financial advisory services for large corporates and institutions; healthcare solutions; and online and mobile banking services. It has operations in Denmark, Finland, Sweden, Norway, the United Kingdom, and internationally. The company was founded in 1871 and is headquartered in Copenhagen, Denmark.

About DNB Bank ASA

DNB Bank ASA provides financial services for individual and business customers in Norway and internationally. The company offers savings, current, and pension accounts; fixed rate and security deposits; home and cabin mortgages, car and consumer loans, business loans, and refinancing; car, house, home contents, travel, personal, and non-life insurance product; payment services; and online and mobile banking services, as well as cards. It also provides overdraft facilities; leasing services; factoring, supply chain, and receivable purchase financing services; bank guarantee, secure trading, documentary collection, and letter of credit services; investment banking services, such as mergers and acquisition, equity and debt capital market, shares and securities, mutual funds and trading, and bonds and commodities; and private financing, as well as equity trading, foreign exchange, interest rates, and risk advisory services. In addition, the company offers treasury management, working capital, trade finance, auto lease and equipment financing, and corporate finance services, as well as act as an estate agents. DNB Bank ASA was founded in 1822 and is headquartered in Oslo, Norway.