Contrasting ING Groep (ING) and Societe Generale (SCGLY)

ING Groep (NYSE:ING) and Societe Generale (OTCMKTS:SCGLY) are both large-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, dividends, risk, analyst recommendations, institutional ownership, valuation and earnings.

Profitability

This table compares ING Groep and Societe Generale’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ING Groep 25.28% 8.87% 0.50%
Societe Generale 14.59% 6.16% 0.31%

Institutional and Insider Ownership

3.5% of ING Groep shares are held by institutional investors. Comparatively, 0.8% of Societe Generale shares are held by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

ING Groep pays an annual dividend of $0.80 per share and has a dividend yield of 7.0%. Societe Generale pays an annual dividend of $0.42 per share and has a dividend yield of 7.2%. ING Groep pays out 48.8% of its earnings in the form of a dividend. Societe Generale pays out 36.2% 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. ING Groep has raised its dividend for 3 consecutive years. Societe Generale is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

ING Groep has a beta of 1.23, suggesting that its stock price is 23% more volatile than the S&P 500. Comparatively, Societe Generale has a beta of 1.03, suggesting that its stock price is 3% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations and price targets for ING Groep and Societe Generale, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ING Groep 0 3 3 0 2.50
Societe Generale 3 5 1 0 1.78

Societe Generale has a consensus price target of $44.50, suggesting a potential upside of 660.68%. Given Societe Generale’s higher probable upside, analysts clearly believe Societe Generale is more favorable than ING Groep.

Earnings & Valuation

This table compares ING Groep and Societe Generale’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
ING Groep $21.36 billion 2.08 $5.62 billion $1.64 6.96
Societe Generale $29.77 billion 0.79 $4.56 billion $1.16 5.04

ING Groep has higher earnings, but lower revenue than Societe Generale. Societe Generale is trading at a lower price-to-earnings ratio than ING Groep, indicating that it is currently the more affordable of the two stocks.

Summary

ING Groep beats Societe Generale on 12 of the 16 factors compared between the two stocks.

About ING Groep

ING Groep N.V., a financial institution, provides various banking products and services to individuals, small and medium-sized enterprises, and mid-corporates. It operates in Retail Netherlands, Retail Belgium, Retail Germany, Retail Other, and Wholesale Banking segments. The company accepts various deposits, such as current and savings accounts; and offers business lending products, as well as consumer lending products, such as residential mortgage loans, term loans, and revolver and personal loans. It also provides mortgage, payment, savings, investment, and secured and unsecured lending products and services. In addition, the company offers specialized lending, corporate finance, and debt and equity markets solutions, as well as working capital, cash management, and trade and treasury services; and financial market, trade finance, overdraft, and foreign exchange transaction services. The company operates in the Netherlands, Belgium, North America, Latin America, Asia, Australia, and rest of Europe. ING Groep N.V. was founded in 1991 and is headquartered in Amsterdam, the Netherlands.

About Societe Generale

Société Générale Société anonyme provides financial services in Europe and internationally. Its primary businesses include French retail banking; international retail banking, insurance, and financial services; and global banking and investor solutions. The company offers retail banking services to individual customers, professionals, and businesses and non-profit clients under the Societe Generale, Crédit du Nord, and Boursorama Banque brands; and international retail banking and consumer credit services to individual and corporate customers in Europe, Russia, the Mediterranean Basin, and Sub-Saharan Africa. It also provides life, retirement savings scheme, personal protection, group retirement, dependence, annuity, auto and home, personal accident, school, and other insurance products; vehicle leasing and fleet management services; and vendor and equipment finance services. In addition, the company assists corporates, financial institutions, public sector institutions, and family offices in terms of investments, strategic advisory, capital raising, and capital structure optimization; and offers structured finance, and investment and risk management solutions. Further, it provides access to market through solutions equities, fixed income and currencies, commodities, and alternative investments; private banking services, including asset allocation, portfolio management, funds, markets, and wealth management solutions to high net worth individuals; and asset management solutions. Additionally, the company offers securities services, such as clearing, custody and trustee, liquidity management, fund administration and asset servicing, fund distribution, and global issuer services. Société Générale Société anonyme was founded in 1864 and is headquartered in Paris, France.

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