Itau Unibanco (NYSE:ITUB) and Banco Bilbao Viscaya Argentaria (NYSE:BBVA) Critical Comparison

Itau Unibanco (NYSE:ITUB) and Banco Bilbao Viscaya Argentaria (NYSE:BBVA) are both large-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, dividends, risk, valuation, analyst recommendations and institutional ownership.

Insider and Institutional Ownership

3.0% of Banco Bilbao Viscaya Argentaria shares are held by institutional investors. 0.6% of Itau Unibanco shares are held by insiders. Comparatively, 0.0% of Banco Bilbao Viscaya Argentaria shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Itau Unibanco and Banco Bilbao Viscaya Argentaria, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Itau Unibanco	0	2	2	0	2.50
Banco Bilbao Viscaya Argentaria	0	5	1	0	2.17

Itau Unibanco presently has a consensus target price of $9.00, suggesting a potential upside of 12.94%. Given Itau Unibanco’s stronger consensus rating and higher probable upside, analysts clearly believe Itau Unibanco is more favorable than Banco Bilbao Viscaya Argentaria.

Profitability

This table compares Itau Unibanco and Banco Bilbao Viscaya Argentaria’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Itau Unibanco	27.27%	21.27%	1.54%
Banco Bilbao Viscaya Argentaria	28.21%	17.65%	1.29%

Volatility and Risk

Itau Unibanco has a beta of 0.59, meaning that its share price is 41% less volatile than the S&P 500. Comparatively, Banco Bilbao Viscaya Argentaria has a beta of 0.81, meaning that its share price is 19% less volatile than the S&P 500.

Dividends

Itau Unibanco pays an annual dividend of $0.48 per share and has a dividend yield of 6.0%. Banco Bilbao Viscaya Argentaria pays an annual dividend of $1.14 per share and has a dividend yield of 4.7%. Itau Unibanco pays out 65.8% of its earnings in the form of a dividend. Banco Bilbao Viscaya Argentaria pays out 54.3% 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.

Earnings & Valuation

This table compares Itau Unibanco and Banco Bilbao Viscaya Argentaria”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Itau Unibanco	$163.78 billion	0.54	$8.03 billion	$0.73	10.92
Banco Bilbao Viscaya Argentaria	$41.77 billion	3.34	$11.89 billion	$2.10	11.65

Banco Bilbao Viscaya Argentaria has lower revenue, but higher earnings than Itau Unibanco. Itau Unibanco is trading at a lower price-to-earnings ratio than Banco Bilbao Viscaya Argentaria, indicating that it is currently the more affordable of the two stocks.

About Itau Unibanco

Itaú Unibanco Holding S.A. offers a range of financial products and services to individuals and corporate customers in Brazil and internationally. The company operates through three segments: Retail Banking, Wholesale Banking, and Activities with the Market + Corporation. It offers current account; loans; credit and debit cards; investment and commercial banking services; real estate lending services; financing and investment services; economic, financial and brokerage advisory; and leasing and foreign exchange services. The company also provides property and casualty insurance products covering loss, damage, or liabilities for assets or persons, as well as life insurance products covering death and personal accident. It serves retail customers, account and non-account holders, individuals and legal entities, high income clients, microenterprises, and small companies, as well as middle-market companies and high net worth clients. The company was formerly known as Itaú Unibanco Banco Múltiplo S.A. and changed its name to Itaú Unibanco Holding S.A. in April 2009. The company was incorporated in 1924 and is headquartered in São Paulo, Brazil. Itaú Unibanco Holding S.A. operates as a subsidiary of IUPAR – Itaú Unibanco Participações S.A.

About Banco Bilbao Viscaya Argentaria

Banco Bilbao Vizcaya Argentaria, S.A. provides retail banking, wholesale banking, and asset management services in the United States, Spain, Mexico, Turkey, South America, and internationally. The company offers savings account, demand deposits, and time deposits; and loan products, such as residential mortgages, other households, credit card loans, loans to enterprises and public sector, as well as consumer finance. It provides insurance and asset management business, including corporate, commercial, SME, payment systems, retail, private and investment banking, pension and life insurance, leasing, factoring, and brokerage. The company provides its products through online and mobile channels. Banco Bilbao Vizcaya Argentaria, S.A. was founded in 1857 and is headquartered in Bilbao, Spain.