Comparing Peoples Financial Services (NASDAQ:PFIS) & Itau Unibanco (NYSE:ITUB)

Peoples Financial Services (NASDAQ:PFIS) and Itau Unibanco (NYSE:ITUB) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, profitability, earnings, dividends, risk and institutional ownership.

Valuation & Earnings

This table compares Peoples Financial Services and Itau Unibanco”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Peoples Financial Services	$283.67 million	2.38	$59.19 million	$8.83	7.65
Itau Unibanco	$30.04 billion	3.48	$8.03 billion	$0.76	12.43

Itau Unibanco has higher revenue and earnings than Peoples Financial Services. Peoples Financial Services is trading at a lower price-to-earnings ratio than Itau Unibanco, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Peoples Financial Services has a beta of 0.75, indicating that its share price is 25% less volatile than the S&P 500. Comparatively, Itau Unibanco has a beta of 0.5, indicating that its share price is 50% less volatile than the S&P 500.

Profitability

This table compares Peoples Financial Services and Itau Unibanco’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Peoples Financial Services	20.66%	17.27%	1.70%
Itau Unibanco	26.41%	21.40%	1.53%

Analyst Ratings

This is a summary of current recommendations and price targets for Peoples Financial Services and Itau Unibanco, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Peoples Financial Services	0	3	1	0	2.25
Itau Unibanco	0	2	3	0	2.60

Peoples Financial Services presently has a consensus target price of $65.50, suggesting a potential downside of 3.03%. Itau Unibanco has a consensus target price of $9.87, suggesting a potential upside of 4.46%. Given Itau Unibanco’s stronger consensus rating and higher possible upside, analysts clearly believe Itau Unibanco is more favorable than Peoples Financial Services.

Institutional & Insider Ownership

31.7% of Peoples Financial Services shares are held by institutional investors. 8.2% of Peoples Financial Services shares are held by company insiders. Comparatively, 0.6% of Itau Unibanco shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

Peoples Financial Services pays an annual dividend of $2.50 per share and has a dividend yield of 3.7%. Itau Unibanco pays an annual dividend of $0.03 per share and has a dividend yield of 0.3%. Peoples Financial Services pays out 28.3% of its earnings in the form of a dividend. Itau Unibanco pays out 3.9% 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. Peoples Financial Services has raised its dividend for 8 consecutive years. Peoples Financial Services is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Itau Unibanco beats Peoples Financial Services on 10 of the 17 factors compared between the two stocks.

About Peoples Financial Services

Peoples Financial Services Corp. operates as the bank holding company for Peoples Security Bank and Trust Company that provides various commercial and retail banking services. The company accepts money market, negotiable order of withdrawal, savings, individual retirement, demand deposit, and certificates of deposit accounts. It also provides residential real estate, automobile, manufactured housing, personal, and home equity loans; and commercial real estate, working capital, construction, small business administration, and agricultural loans, as well as loans for equipment and other commercial needs, and mineral rights. In addition, the company offers fiduciary and investment services; investment management, IRA trustee, estate administration, living and life insurance trust, trustee under will, guardianship, custodial/IRA custodial, and corporate trust services, as well as pension and profit-sharing plans. Further, it provides wealth management products and services comprising investment portfolio management, estate and business succession planning, annuities, insurance, retirement plan, and tax planning, as well as education funding strategies; and securities, brokerage, and investor services. Additionally, the company offers small business checking and merchant money market accounts, online and telephone banking, business credit cards, merchant line of credit, and financial checkup services; and remote deposit capture, automatic clearing house transaction, cash management, automated teller machine, point of sale transaction, safe deposit box, night depository, direct deposit, and official check services. It serves business, non-profit, governmental, municipal agency, and professional customers, as well as retail customers. Peoples Financial Services Corp. was founded in 1905 and is headquartered in Scranton, Pennsylvania.

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.