Lloyds Banking Group (NYSE:LYG) and UBS Group (NYSE:UBS) Financial Review

UBS Group (NYSE:UBS) and Lloyds Banking Group (NYSE:LYG) are both large-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, institutional ownership, profitability, valuation, analyst recommendations, risk and earnings.

Dividends

UBS Group pays an annual dividend of $0.22 per share and has a dividend yield of 0.6%. Lloyds Banking Group pays an annual dividend of $0.12 per share and has a dividend yield of 2.5%. UBS Group pays out 9.9% of its earnings in the form of a dividend. Lloyds Banking Group pays out 34.3% 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. UBS Group has increased its dividend for 5 consecutive years.

Profitability

This table compares UBS Group and Lloyds Banking Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
UBS Group	11.02%	8.37%	0.46%
Lloyds Banking Group	18.04%	8.38%	0.42%

Valuation & Earnings

This table compares UBS Group and Lloyds Banking Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
UBS Group	$46.14 billion	2.64	$5.09 billion	$2.22	17.13
Lloyds Banking Group	$19.38 billion	3.69	$5.65 billion	$0.35	13.77

Lloyds Banking Group has lower revenue, but higher earnings than UBS Group. Lloyds Banking Group is trading at a lower price-to-earnings ratio than UBS Group, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

UBS Group has a beta of 1.2, indicating that its share price is 20% more volatile than the S&P 500. Comparatively, Lloyds Banking Group has a beta of 1.05, indicating that its share price is 5% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for UBS Group and Lloyds Banking Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
UBS Group	1	5	5	2	2.62
Lloyds Banking Group	0	4	5	1	2.70

Institutional and Insider Ownership

2.2% of Lloyds Banking Group shares are owned by institutional investors. 1.0% of UBS Group shares are owned by company insiders. Comparatively, 0.0% of Lloyds Banking Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

UBS Group beats Lloyds Banking Group on 9 of the 16 factors compared between the two stocks.

About UBS Group

UBS Group AG provides financial advice and solutions to private, institutional, and corporate clients worldwide. It operates through five divisions: Global Wealth Management, Personal & Corporate Banking, Asset Management, Investment Bank, and Non-core and Legacy. The company offers investment advice, estate and wealth planning, investing, corporate and banking, and investment management, as well as mortgage, securities-based, and structured lending solutions. It also provides personal banking products and services, such as deposits, credit and debit cards, and online and mobile banking, as well as lending, investments, retirement, and wealth management services; and corporate and institutional solutions, including equity and debt capital markets, syndicated and structured credit, private placements, leasing, traditional financing, and transaction banking solutions for payment and cash management services, trade and export finance, and global custody solutions. In addition, the company offers equities, fixed income, hedge funds, real estate and private markets, indexed and alternative beta strategies, asset allocation and currency investment strategies, customized multi-asset solutions, advisory and fiduciary services, and multi-manager hedge fund solutions and advisory services. Further, it advises clients on strategic business opportunities and helps them raise capital to fund their activities; enables its clients to buy, sell, and finance securities on capital markets and to manage their risks and liquidity; distributes, trades in, finances, and clears cash equities and equity-linked products; structures, originates, and distributes new equity and equity-linked issues; and originates, distributes, manages risk, and provides liquidity in foreign exchange, rates, credit and precious metals. The company was formerly known as UBS AG and changed its name to UBS Group AG in December 2014. UBS Group AG was founded in 1862 and is headquartered in Zurich, Switzerland.

About Lloyds Banking Group

Lloyds Banking Group plc, together with its subsidiaries, provides a range of banking and financial services in the United Kingdom and internationally. It operates in three segments: Retail; Commercial Banking; and Insurance, Pensions and Investments. The Retail segment offers a range of financial service products, including current accounts, savings, mortgages, motor finance, unsecured loans, leasing solutions, and credit cards to personal customers. The Commercial Banking segment provides lending, transactional banking, working capital management, risk management, and debt financing services to small and medium-sized entities, corporates, and institutions. The Insurance, Pensions, and Investments segment offers insurance, investment, and pension management products and services. It also provides digital banking services. The company offers its products and services under the Lloyds Bank, Halifax, Bank of Scotland, Scottish Widows, MBNA, Schroders Personal Wealth, Black Horse, Lex Autolease, Birmingham Midshires, LDC, AMC, Embark Group, Citra, IWeb, Cavendish Online, and Tusker brand names. Lloyds Banking Group plc was founded in 1695 and is headquartered in London, the United Kingdom.