City National Corp (NYSE: CYN) and Itau Unibanco Banco Holding SA (NYSE:ITUB) are both mid-cap banks – nec companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, valuation, dividends, institutional ownership, earnings, risk and analyst recommendations.

Profitability

This table compares City National Corp and Itau Unibanco Banco Holding SA’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
City National Corp 21.28% 9.54% 0.83%
Itau Unibanco Banco Holding SA 18.82% 17.81% 1.81%

Analyst Ratings

This is a summary of current recommendations and price targets for City National Corp and Itau Unibanco Banco Holding SA, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
City National Corp 0 0 0 0 N/A
Itau Unibanco Banco Holding SA 0 3 0 0 2.00

Itau Unibanco Banco Holding SA has a consensus target price of $12.50, suggesting a potential downside of 1.50%. Given Itau Unibanco Banco Holding SA’s higher probable upside, analysts plainly believe Itau Unibanco Banco Holding SA is more favorable than City National Corp.

Institutional and Insider Ownership

4.5% of Itau Unibanco Banco Holding SA shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares City National Corp and Itau Unibanco Banco Holding SA’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
City National Corp N/A N/A N/A $4.41 20.33
Itau Unibanco Banco Holding SA $46.19 billion 1.79 $6.67 billion $1.15 11.03

Itau Unibanco Banco Holding SA has higher revenue and earnings than City National Corp. Itau Unibanco Banco Holding SA is trading at a lower price-to-earnings ratio than City National Corp, indicating that it is currently the more affordable of the two stocks.

Dividends

Itau Unibanco Banco Holding SA pays an annual dividend of $0.06 per share and has a dividend yield of 0.5%. City National Corp does not pay a dividend. Itau Unibanco Banco Holding SA pays out 5.2% of its earnings in the form of a dividend. City National Corp has increased its dividend for 6 consecutive years.

Summary

Itau Unibanco Banco Holding SA beats City National Corp on 6 of the 10 factors compared between the two stocks.

About City National Corp

City National Corporation is a bank holding company and a financial holding company. The Corporation provides a range of banking, investment and trust services to its clients through its wholly-owned banking subsidiary, City National Bank (the Bank). The Company operates through around 75 offices, including 16 full-service regional centers, in Southern California, the San Francisco Bay area, Nevada, New York City, Nashville, Tennessee and Atlanta, Georgia. The Company operates through three segments: Commercial and Private Banking, Wealth Management and Other. The Commercial and Private Banking segment provides banking products and services, including commercial and mortgage lending, lines of credit, equipment lease financing, deposits, cash management services, international trade finance and letters of credit. Wealth Management segment includes all investment advisory affiliates and offers wealth management services. The Other segment includes all other subsidiaries.

About Itau Unibanco Banco Holding SA

Itau Unibanco Holding S.A. is a holding company. The Company provides a range of financial products and services to individual and corporate clients in Brazil and abroad. The Company operates through three segments: Retail Banking, Wholesale Banking, and Activities with the Market + Corporation. The Retail Banking segment offers banking products and services to a diversified client base of account holders and non-account holders, individuals and companies. The Wholesale Banking segment offers products and services to middle-market companies, high-net worth clients (Private Banking) and institutional clients. The Company’s Activities with the Market + Corporation segment mainly manages the financial results associated with capital surplus, subordinated debt, and net debt of tax credits and debits. The Company provides banking activities, through its commercial, investment, real estate loan, finance and investment credit, and lease portfolios, including foreign exchange operations.

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