Critical Review: Regions Financial (RF) versus BANCO DO BRASIL/S (BDORY)

Regions Financial (NYSE:RF) and BANCO DO BRASIL/S (OTCMKTS:BDORY) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, valuation, risk, dividends and analyst recommendations.

Dividends

Regions Financial pays an annual dividend of $0.56 per share and has a dividend yield of 3.7%. BANCO DO BRASIL/S pays an annual dividend of $0.12 per share and has a dividend yield of 1.0%. Regions Financial pays out 41.2% of its earnings in the form of a dividend. Regions Financial has raised its dividend for 6 consecutive years. Regions Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Regions Financial has a beta of 1.48, indicating that its stock price is 48% more volatile than the S&P 500. Comparatively, BANCO DO BRASIL/S has a beta of 1.1, indicating that its stock price is 10% more volatile than the S&P 500.

Profitability

This table compares Regions Financial and BANCO DO BRASIL/S’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Regions Financial 27.23% 10.84% 1.27%
BANCO DO BRASIL/S 9.52% 12.39% 0.88%

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Regions Financial and BANCO DO BRASIL/S, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Regions Financial 1 6 7 1 2.53
BANCO DO BRASIL/S 0 1 1 0 2.50

Regions Financial presently has a consensus target price of $17.28, indicating a potential upside of 13.30%. Given Regions Financial’s stronger consensus rating and higher possible upside, equities analysts plainly believe Regions Financial is more favorable than BANCO DO BRASIL/S.

Institutional & Insider Ownership

74.4% of Regions Financial shares are owned by institutional investors. 0.3% of Regions Financial shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Regions Financial and BANCO DO BRASIL/S’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Regions Financial $6.41 billion 2.42 $1.76 billion $1.36 11.21
BANCO DO BRASIL/S $35.32 billion N/A $3.52 billion N/A N/A

BANCO DO BRASIL/S has higher revenue and earnings than Regions Financial.

Summary

Regions Financial beats BANCO DO BRASIL/S on 12 of the 16 factors compared between the two stocks.

Regions Financial Company Profile

Regions Financial Corporation, a financial holding company, provides banking and bank-related services to individual and corporate customers in the United States. It operates through three segments: Corporate Bank, Consumer Bank, and Wealth Management. The Corporate Bank segment offers commercial banking services, such as commercial and industrial, commercial real estate, and investor real estate lending; equipment lease financing services; corresponding deposit products; and securities underwriting and placement, loan syndication and placement, foreign exchange, derivatives, merger and acquisition, and other advisory services. It serves corporate, middle market, and commercial real estate developers and investors. The Consumer Bank segment provides consumer banking products and services related to residential first mortgages, home equity lines and loans, branch small business and indirect loans, consumer credit cards, and other consumer loans, as well as the corresponding deposit relationships. The Wealth Management segment offers credit related products, and retirement and savings solutions; and trust and investment management, asset management, and estate planning services to individuals, businesses, governmental institutions, and non-profit entities. The company also provides investment and insurance products; low income housing tax credit corporate fund syndication services; and other specialty financing services. As of February 21, 2019, it operated 1,500 banking offices and 2,000 automated teller machines across the South, Midwest, and Texas. Regions Financial Corporation was founded in 1852 and is headquartered in Birmingham, Alabama.

BANCO DO BRASIL/S Company Profile

Banco do Brasil S.A. provides banking products and services for individuals, companies, and public sectors in Brazil and internationally. The company's Banking segment offers various products and services, including deposits, loans, and services to retail, wholesale, and public sector markets, as well as to micro-entrepreneurs and the low income population. Its Investments segment engages in the intermediation and distribution of debts in the primary and secondary markets; equity investment activities; and rendering of financial services. The company's Fund Management segment is involved in the purchase, sale, and custody of securities, as well as the management of portfolios, and investment funds and clubs. Its Insurance, Pension and Capitalization segment provides life, property, and automobile insurance products, as well as private pension and capitalization plans. The company's Payment Methods segment is involved in the funding, transmission, processing, and settlement of transactions through electronic means. Its Other segment engages in the provision of credit recovery and consortium administration services; development, manufacturing, leasing, and integration of digital electronic systems and equipment, peripherals, programs, inputs, and computing supplies; intermediation of air tickets; and lodging and organization of events. Banco do Brasil S.A. was founded in 1808 and is headquartered in Brasília, Brazil.

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