Analyzing Wells Fargo & Company (NYSE:WFC) & Credicorp (NYSE:BAP)

Wells Fargo & Company (NYSE:WFC) and Credicorp (NYSE:BAP) are both large-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, valuation, analyst recommendations, dividends, risk, institutional ownership and earnings.

Earnings and Valuation

This table compares Wells Fargo & Company and Credicorp”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Wells Fargo & Company	$123.53 billion	2.17	$21.34 billion	$6.88	12.88
Credicorp	$8.01 billion	4.48	$1.94 billion	$26.99	14.08

Wells Fargo & Company has higher revenue and earnings than Credicorp. Wells Fargo & Company is trading at a lower price-to-earnings ratio than Credicorp, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

75.9% of Wells Fargo & Company shares are owned by institutional investors. Comparatively, 89.8% of Credicorp shares are owned by institutional investors. 0.1% of Wells Fargo & Company shares are owned by company insiders. Comparatively, 15.9% of Credicorp shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Wells Fargo & Company and Credicorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Wells Fargo & Company	17.55%	13.85%	1.06%
Credicorp	25.04%	20.52%	2.87%

Dividends

Wells Fargo & Company pays an annual dividend of $2.00 per share and has a dividend yield of 2.3%. Credicorp pays an annual dividend of $14.48 per share and has a dividend yield of 3.8%. Wells Fargo & Company pays out 29.1% of its earnings in the form of a dividend. Credicorp pays out 53.6% 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. Wells Fargo & Company has increased its dividend for 4 consecutive years and Credicorp has increased its dividend for 3 consecutive years.

Volatility & Risk

Wells Fargo & Company has a beta of 0.92, meaning that its stock price is 8% less volatile than the S&P 500. Comparatively, Credicorp has a beta of 0.88, meaning that its stock price is 12% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Wells Fargo & Company and Credicorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Wells Fargo & Company	0	10	14	2	2.69
Credicorp	0	3	4	0	2.57

Wells Fargo & Company currently has a consensus target price of $98.61, indicating a potential upside of 11.29%. Credicorp has a consensus target price of $418.40, indicating a potential upside of 10.12%. Given Wells Fargo & Company’s stronger consensus rating and higher possible upside, research analysts plainly believe Wells Fargo & Company is more favorable than Credicorp.

About Wells Fargo & Company

Wells Fargo & Co. is a diversified and community-based financial services company, which engages in the provision of banking, insurance, investments, mortgage, and consumer and commercial finance products and services. It operates through the following segments: Consumer Banking and Lending, Commercial Banking, Corporate and Investment Banking, and Wealth and Investment Management. The Consumer Banking and Lending segment offers consumer and small business banking, home lending, credit cards, auto, and personal lending. The Commercial Banking segment provides banking and credit products across industry sectors and municipalities, secured lending and lease products, and treasury management. The Corporate and Investment Banking segment is composed of corporate banking, investment banking, treasury management, commercial real estate lending and servicing, and equity and fixed income solutions, as well as sales, trading, and research capabilities. The Wealth and Investment Management segment refers to personalized wealth management, brokerage, financial planning, lending, private banking, trust, and fiduciary products and services. The company was founded by Henry Wells and William G. Fargo on March 18, 1852 and is headquartered in San Francisco, CA.

About Credicorp

Credicorp Ltd. provides various financial, insurance, and health services and products primarily in Peru and internationally. It operates through Universal Banking, Insurance and Pensions, Microfinance, and Investment Banking and Equity Management segments. The Universal Banking segment grants various credits and financial instruments to individuals and legal entities; and various deposits and current accounts. The Insurance and Pensions segment issues insurance policies to cover losses in commercial property, transport, marine vessels, automobiles, life, health, and pensions; and management services for private pension funds. The Microfinance segment provides management of loans, deposits, and current accounts for small and microenterprises. The Investment Banking and Equity Management segment is involved in provision of brokerage and investment management services for corporations, institutional investors, governments, and foundations; structuring and placement of issues in the primary market; execution and negotiation of transactions in the secondary market; and structuring of securitization processes for corporate customers and manages mutual funds. The company was founded in 1889 and is headquartered in Lima, Peru.