Financial Analysis: Swedbank (SWDBY) and HANG SENG Bk Lt/S (HSNGY)

HANG SENG Bk Lt/S (OTCMKTS: SWDBY) and Swedbank (OTCMKTS:SWDBY) are both large-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, dividends, profitability, analyst recommendations, institutional ownership, risk and valuation.

Analyst Recommendations

This is a summary of recent ratings and target prices for HANG SENG Bk Lt/S and Swedbank, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
HANG SENG Bk Lt/S 0 0 0 0 N/A
Swedbank 1 1 0 0 1.50

Volatility & Risk

HANG SENG Bk Lt/S has a beta of 0.65, meaning that its share price is 35% less volatile than the S&P 500. Comparatively, Swedbank has a beta of 0.88, meaning that its share price is 12% less volatile than the S&P 500.

Earnings & Valuation

This table compares HANG SENG Bk Lt/S and Swedbank’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
HANG SENG Bk Lt/S $10.17 billion 5.12 $2.57 billion $1.32 20.65
Swedbank $6.13 billion 4.23 $2.27 billion $2.04 11.43

HANG SENG Bk Lt/S has higher revenue and earnings than Swedbank. Swedbank is trading at a lower price-to-earnings ratio than HANG SENG Bk Lt/S, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

0.0% of HANG SENG Bk Lt/S shares are owned by institutional investors. Comparatively, 0.1% of Swedbank shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

HANG SENG Bk Lt/S pays an annual dividend of $0.58 per share and has a dividend yield of 2.1%. Swedbank pays an annual dividend of $1.28 per share and has a dividend yield of 5.5%. HANG SENG Bk Lt/S pays out 43.9% of its earnings in the form of a dividend. Swedbank pays out 62.7% 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.

Profitability

This table compares HANG SENG Bk Lt/S and Swedbank’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
HANG SENG Bk Lt/S N/A N/A N/A
Swedbank 39.61% 15.74% 0.88%

Summary

Swedbank beats HANG SENG Bk Lt/S on 7 of the 12 factors compared between the two stocks.

About HANG SENG Bk Lt/S

Hang Seng Bank Limited, together with its subsidiaries, provides various banking and related financial services to individual, corporate, commercial, small and medium-sized enterprise, and institutional customers in Hong Kong, Mainland China, and internationally. It operates through four segments: Retail Banking and Wealth Management, Commercial Banking, Global Banking and Markets, and Other. The company offers personal banking services, including current and savings accounts, mortgages and personal loans, credit cards, and insurance and wealth management services, as well as consumer lending services. It also provides corporate lending, trade and receivable finance, payments and cash management, treasury and foreign exchange, general insurance, key-person insurance, investment, and corporate wealth management services, as well as general banking, interest rate, money market, structured, derivative products, etc. In addition, the company offers trustee, nominee, retirement benefit and life assurance, fund management, stock broking, and property management services, as well as engages in the compilation and dissemination of the Hang Seng share index. As of March 12, 2018, it operated 270 service outlets in Hong Kong; branches in Macau and Singapore; and a representative office in Taipei. Hang Seng Bank Limited, through its subsidiary, Hang Seng Bank (China) Limited, operates a mainland China network with outlets in the Pearl River delta, the Yangtze River delta, the Bohai Rim region, and Midwest China. The company was founded in 1933 and is headquartered in Central, Hong Kong. Hang Seng Bank Limited is a subsidiary of The Hongkong and Shanghai Banking Corporation Limited.

About Swedbank

Swedbank AB (publ) provides various banking products and services to private, corporate, and organizational customers. The company operates through Swedish Banking, Baltic Banking, and Large Corporates & Institutions segments. It offers deposit and lending products; guarantees; non-life insurance products; brokerage and other securities; real estate brokerage; and asset management, financing, and life insurance and pension services. The company also offers investments and trading services, including currency, fixed income, and equity trading services, as well as structured products; advisory and investment banking products and services, such as corporate financing, debt capital market, and loans and syndication services; and transaction banking services, such as cash management, trade finance, securities, commercial payments, account, and clearing and settlement services. In addition, it provides private banking products and services, such as salary accounts, credit and debit cards, mortgage finance, and investment advice, as well as trades in derivatives; and telephone, Internet, and mobile banking services. The company has 218 branches in Sweden, 34 branches in Estonia, 36 in Latvia, and 63 in Lithuania. It also operates in Norway, Finland, Denmark, Luxembourg, China, the United States, and South Africa. The company was formerly known as ForeningsSparbanken AB and changed its name to Swedbank AB (publ) in September 2006. Swedbank AB (publ) was founded in 1820 and is headquartered in Sundbyberg, Sweden.

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