Analyzing Danske Bank (OTCMKTS:DNKEY) & Swedbank (OTCMKTS:SWDBY)

Danske Bank (OTCMKTS:DNKEY) and Swedbank (OTCMKTS:SWDBY) are both large-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their dividends, profitability, valuation, institutional ownership, risk, earnings and analyst recommendations.

Analyst Recommendations

This is a breakdown of current recommendations for Danske Bank and Swedbank, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Danske Bank	0	1	4	0	2.80
Swedbank	3	4	0	0	1.57

Volatility and Risk

Danske Bank has a beta of 0.61, meaning that its stock price is 39% less volatile than the S&P 500. Comparatively, Swedbank has a beta of 0.66, meaning that its stock price is 34% less volatile than the S&P 500.

Earnings and Valuation

This table compares Danske Bank and Swedbank”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Danske Bank	$8.18 billion	5.04	$3.43 billion	$2.02	12.23
Swedbank	$17.47 billion	2.46	$3.30 billion	SEK 2.89	13.21

Danske Bank has higher earnings, but lower revenue than Swedbank. Danske Bank is trading at a lower price-to-earnings ratio than Swedbank, indicating that it is currently the more affordable of the two stocks.

Dividends

Danske Bank pays an annual dividend of $0.76 per share and has a dividend yield of 3.1%. Swedbank pays an annual dividend of SEK 2.03 per share and has a dividend yield of 5.3%. Danske Bank pays out 37.6% of its earnings in the form of a dividend. Swedbank pays out 70.2% 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.

Profitability

This table compares Danske Bank and Swedbank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Danske Bank	40.42%	13.01%	0.61%
Swedbank	26.30%	15.55%	1.06%

Summary

Swedbank beats Danske Bank on 7 of the 13 factors compared between the two stocks.

About Danske Bank

Danske Bank A/S provides various banking products and services to corporate, institutional, and international clients. The company offers insurance and pension products, mortgage finance and real-estate brokerage services, asset management and trading services in fixed income products, foreign exchange services, and equities. It also provides advisory services to personal and private banking customers; and business advisory services, including acquisition, change of ownership, strategic development, or international expansion. In addition, the company offers financing, risk management, investment, and financial advisory services for large corporates and institutions; healthcare solutions; and online and mobile banking services. It has operations in Denmark, Finland, Sweden, Norway, the United Kingdom, and internationally. The company was founded in 1871 and is headquartered in Copenhagen, Denmark.

About Swedbank

Swedbank AB (publ) provides various banking products and services to private and corporate customers in Sweden, Estonia, Latvia, Lithuania, Norway, the United States, Finland, Denmark, Luxembourg, and China. The company operates through three business areas: Swedish Banking, Baltic Banking, and Corporates and Institutions. It offers savings accounts, mutual funds and insurance savings, pension savings, institutional asset management, and other savings and investment products; private residential lending, consumer financing, corporate lending, leasing, and other financing products, as well as trade finance and factoring services; and current accounts, cash handling, debit and credit cards, and card acquiring, as well as domestic, international, mobile, document, and other payment products. The company also provides equity trading, structured products, corporate finance, custody services, fixed income and currency trading, and other capital market products; and administrative services, treasury operations, real estate brokerage and management services, legal services, safe deposit boxes, and other services. In addition, it offers pension insurance and plan, life, endowment insurance, and personal insurance products; investment management, investment banking, and mortgage lending services; and transaction banking services comprising cash management, securities, account, and clearing and settlement services, as well as Internet and mobile banking services. The company was formerly known as ForeningsSparbanken AB and changed its name to Swedbank AB (publ) in September 2006. Swedbank AB (publ) was founded in 1820 and is headquartered in Sundbyberg, Sweden.