Head-To-Head Analysis: Shinhan Financial Group (NYSE:SHG) & National Bank of Canada (OTCMKTS:NTIOF)

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

Valuation & Earnings

This table compares National Bank of Canada and Shinhan Financial Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
National Bank of Canada	$21.96 billion	2.27	$2.87 billion	$7.23	17.76
Shinhan Financial Group	$24.56 billion	1.38	$3.12 billion	$10.27	6.79

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

Institutional and Insider Ownership

0.1% of National Bank of Canada shares are owned by institutional investors. Comparatively, 7.8% of Shinhan Financial Group shares are owned by institutional investors. 0.3% of National Bank of Canada shares are owned by company insiders. Comparatively, 1.0% of Shinhan Financial Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Volatility & Risk

National Bank of Canada has a beta of 0.9, indicating that its stock price is 10% less volatile than the S&P 500. Comparatively, Shinhan Financial Group has a beta of 1, indicating that its stock price has a similar volatility profile to the S&P 500.

Dividends

National Bank of Canada pays an annual dividend of $3.55 per share and has a dividend yield of 2.8%. Shinhan Financial Group pays an annual dividend of $1.20 per share and has a dividend yield of 1.7%. National Bank of Canada pays out 49.1% of its earnings in the form of a dividend. Shinhan Financial Group pays out 11.7% 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.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for National Bank of Canada and Shinhan Financial Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
National Bank of Canada	0	5	3	1	2.56
Shinhan Financial Group	0	1	1	0	2.50

Profitability

This table compares National Bank of Canada and Shinhan Financial Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
National Bank of Canada	13.07%	15.74%	0.83%
Shinhan Financial Group	22.38%	12.45%	0.98%

Summary

Shinhan Financial Group beats National Bank of Canada on 9 of the 16 factors compared between the two stocks.

About National Bank of Canada

National Bank of Canada provides financial services to individuals, businesses, institutional clients, and governments in Canada and internationally. It operates through four segments: Personal and Commercial, Wealth Management, Financial Markets, and U.S. Specialty Finance and International. The Personal and Commercial segment offers personal banking services, including transaction solutions, mortgage loans and home equity lines of credit, consumer loans, payment solutions, and savings and investment solutions; various insurance products; and commercial banking services, such as credit, and deposit, investment solutions, international trade, foreign exchange transactions, payroll, cash management, insurance, electronic transactions, and complimentary services. The Wealth Management segment provides full-service brokerage, private banking, direct brokerage, investment solutions, administrative and trade execution, transaction products, and trust and estate services. The Financial Markets segment offers corporate banking, advisory, and capital markets services; and project financing, debt, and equity underwriting; advisory services in the areas of mergers and acquisitions, and financing. The U.S. Specialty Finance and International segment provides specialty finance products; and personal and commercial banking in Cambodia. National Bank of Canada was founded in 1859 and is headquartered in Montreal, Canada.

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.