Sumitomo Mitsui Financial Grp (NYSE:SMFG) and Bancolombia (NYSE:CIB) Financial Analysis

Sumitomo Mitsui Financial Grp (NYSE:SMFG) and Bancolombia (NYSE:CIB) are both large-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, valuation, analyst recommendations, earnings, institutional ownership, risk and dividends.

Insider and Institutional Ownership

2.8% of Sumitomo Mitsui Financial Grp shares are held by institutional investors. Comparatively, 7.4% of Bancolombia shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Sumitomo Mitsui Financial Grp and Bancolombia’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sumitomo Mitsui Financial Grp 12.67% 6.25% 0.36%
Bancolombia 15.03% 11.81% 1.40%

Volatility and Risk

Sumitomo Mitsui Financial Grp has a beta of 1.18, suggesting that its share price is 18% more volatile than the S&P 500. Comparatively, Bancolombia has a beta of 0.76, suggesting that its share price is 24% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and target prices for Sumitomo Mitsui Financial Grp and Bancolombia, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sumitomo Mitsui Financial Grp 0 1 0 0 2.00
Bancolombia 2 1 2 0 2.00

Dividends

Sumitomo Mitsui Financial Grp pays an annual dividend of $0.28 per share and has a dividend yield of 4.1%. Bancolombia pays an annual dividend of $1.25 per share and has a dividend yield of 2.6%. Sumitomo Mitsui Financial Grp pays out 29.2% of its earnings in the form of a dividend. Bancolombia pays out 35.9% 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. Bancolombia has increased its dividend for 2 consecutive years. Sumitomo Mitsui Financial Grp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares Sumitomo Mitsui Financial Grp and Bancolombia’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sumitomo Mitsui Financial Grp $51.74 billion 0.94 $4.98 billion $0.96 7.19
Bancolombia $6.03 billion 1.94 $797.66 million $3.48 13.98

Sumitomo Mitsui Financial Grp has higher revenue and earnings than Bancolombia. Sumitomo Mitsui Financial Grp is trading at a lower price-to-earnings ratio than Bancolombia, indicating that it is currently the more affordable of the two stocks.

Summary

Bancolombia beats Sumitomo Mitsui Financial Grp on 9 of the 14 factors compared between the two stocks.

Sumitomo Mitsui Financial Grp Company Profile

Sumitomo Mitsui Financial Group, Inc., together with its subsidiaries, provides commercial banking, leasing, securities, consumer finance, and other services primarily in Japan. It operates through four segments: Wholesale Business, Retail Business, International Business, and Global Markets Business. The Wholesale Business segment provides financing, investment management, risk hedging and settlement services, as well as financial solutions for mergers and acquisition and other advisory services and leasing, primarily for large-and mid-sized corporate clients; and various leasing services, including equipment, and operating and leveraged leasing. The Retail Business segment offers wealth management, settlement services, consumer finance, and housing loans. The International Business segment provides loans, deposits, clearing services, trade finance, project finance, loan syndication, derivatives, and global cash management services; underwriting services; and leasing services related to the construction machinery, transportation equipment, industrial machinery, medical equipment, and aircraft leasing. As of March 31, 2018, this segment's network consisted of 18 branches, 22 sub-branches, and 4 representative offices. The Global Markets Business segment offers foreign exchange products, derivatives, bonds, stocks and other marketable financial products, and undertakes asset liability management operations. It also offers system development, data processing, management consulting, and economic research services; and investment advisory and investment trust management services. The company was founded in 2002 and is headquartered in Tokyo, Japan.

Bancolombia Company Profile

Bancolombia S.A. provides various banking products and services to individual, corporate, and government customers in Colombia, Latin America, and the Caribbean region. The company operates in nine segments: Banking Colombia, Banking Panama, Banking El Salvador, Banking Guatemala, Trust, Investment Banking, Brokerage, Off Shore, and All Other. It offers checking and savings accounts, fixed term deposits, and investment products; trade financing, loans funded by domestic development banks, working capital loans, credit cards, personal and vehicle loans, payroll loans, overdrafts, and financing for industrial projects; mortgage banking and factoring services; and financial and operating leasing services. The company also provides capital market products, including futures, forwards, options, and swaps; and brokerage, investment advisory, and private banking services, including selling and distributing equities, futures, foreign currencies, fixed income securities, mutual funds, and structured products. In addition, it offers cash management services; foreign currency transaction services; and life, auto, commercial, and homeowner's insurance products. Further, the company provides investment banking services comprising project and acquisition finance, debt and equity capital markets, principal investments, merger and acquisition, restructurings, and structured corporate lending; trust and asset management services, such as money market accounts, mutual and pension funds, private equity funds, payment trust, custody, and corporate trust; digital banking and revolving credit facility services. Additionally, it is involved in transportation, real estate brokerage, maintenance and remodeling, advertising and marketing, and outsourcing activities. The company operates 1,153 branches, 10,349 banking correspondents, and 590 mobile service spots; 227 kiosks; and 5,630 automatic teller machines. Bancolombia S.A. was founded in 1945 and is headquartered in Medellín, Colombia.

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