Contrasting Westpac Banking (WBK) and Royal Bank of Scotland Group (RBSPF)

Westpac Banking (NYSE:WBK) and Royal Bank of Scotland Group (OTCMKTS:RBSPF) are both large-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, dividends, risk, institutional ownership, valuation, profitability and analyst recommendations.

Dividends

Westpac Banking pays an annual dividend of $1.31 per share and has a dividend yield of 7.6%. Royal Bank of Scotland Group does not pay a dividend. Westpac Banking pays out 75.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Westpac Banking has raised its dividend for 2 consecutive years.

Insider and Institutional Ownership

0.5% of Westpac Banking shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Westpac Banking and Royal Bank of Scotland Group’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Westpac Banking $28.76 billion 2.07 $6.16 billion $1.74 9.97
Royal Bank of Scotland Group $20.84 billion 1.67 $2.79 billion N/A N/A

Westpac Banking has higher revenue and earnings than Royal Bank of Scotland Group.

Analyst Recommendations

This is a summary of current ratings for Westpac Banking and Royal Bank of Scotland Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Westpac Banking 3 3 1 0 1.71
Royal Bank of Scotland Group 0 0 0 0 N/A

Profitability

This table compares Westpac Banking and Royal Bank of Scotland Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Westpac Banking N/A N/A N/A
Royal Bank of Scotland Group 12.31% 5.09% 0.34%

Risk and Volatility

Westpac Banking has a beta of 1.07, indicating that its share price is 7% more volatile than the S&P 500. Comparatively, Royal Bank of Scotland Group has a beta of 1.03, indicating that its share price is 3% more volatile than the S&P 500.

Summary

Westpac Banking beats Royal Bank of Scotland Group on 8 of the 12 factors compared between the two stocks.

Westpac Banking Company Profile

Westpac Banking Corporation provides various banking and financial services in Australia, New Zealand, Asia, the Pacific region, and internationally. It operates through five divisions: Consumer Bank, Business Bank, BT Financial Group, Westpac Institutional Bank, and Westpac New Zealand. It offers everyday banking, savings, term deposit, moving to Australia, under 21 and student, business one, community solutions one, not-for-profit savings, and foreign currency accounts; term and farm management deposits; debit, credit, and travel money cards; home, personal, investment, small business, and commercial loans; and equipment, automotive, cash flow, property, insurance premium, corporate and structured finance, and trade and supply chain financing services. It also provides home and content, landlord, car, travel, boat, caravan and trailer, life, credit card and loan repayment, income protection, business, farm pack, person income, and business overheads insurance products; superannuation and retirement products; investment portfolios; instalment warrants; and trading, financial advisory, wealth, foreign currency exchange, international payment, cash flow management, international trade, and import and export services. In addition, it offers industry specific banking and treasury services; other services, such as emergency cash, online and telephone banking, ATMs, unclaimed money, travel center, margin lending, and banking services to migrants moving to Australia; and mobile wallets. Further, it provides capital advisory and fund management, transactional and private banking, and financial market services. It serves individuals; micro, small, and medium enterprises; and commercial, corporate, institutional, and government customers. The company was formerly known as Bank of New South Wales and changed its name to Westpac Banking Corporation in October 1982. The company was founded in 1817 and is headquartered in Sydney, Australia.

Royal Bank of Scotland Group Company Profile

The Royal Bank of Scotland Group plc, together with its subsidiaries, provides banking and financial products and services to personal, commercial, corporate, and institutional customers worldwide. It operates through Personal & Business Banking, Commercial & Private Banking, RBS International, and NatWest Markets segments. The company also offers wealth management, financial planning, investment management, asset finance, and offshore banking; and financing and risk solutions, as well as trading and flow sales services. The Royal Bank of Scotland Group plc was founded in 1727 and is headquartered in Edinburgh, the United Kingdom.

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