HDFC Bank (HDB) vs. United Overseas Bank (UOVEY) Head-To-Head Review

HDFC Bank (NYSE:HDB) and United Overseas Bank (OTCMKTS:UOVEY) are both large-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, profitability, analyst recommendations, dividends, earnings, risk and valuation.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for HDFC Bank and United Overseas Bank, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
HDFC Bank 0 0 0 0 N/A
United Overseas Bank 0 0 0 0 N/A

Dividends

HDFC Bank pays an annual dividend of $0.55 per share and has a dividend yield of 0.6%. United Overseas Bank pays an annual dividend of $1.47 per share and has a dividend yield of 3.7%. HDFC Bank pays out 17.7% of its earnings in the form of a dividend. United Overseas Bank pays out 51.2% 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. HDFC Bank has raised its dividend for 5 consecutive years.

Risk & Volatility

HDFC Bank has a beta of 0.97, meaning that its share price is 3% less volatile than the S&P 500. Comparatively, United Overseas Bank has a beta of 1.12, meaning that its share price is 12% more volatile than the S&P 500.

Valuation and Earnings

This table compares HDFC Bank and United Overseas Bank’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
HDFC Bank $14.81 billion 5.31 $2.74 billion $3.11 29.39
United Overseas Bank $8.99 billion 3.65 $2.46 billion $2.87 13.76

HDFC Bank has higher revenue and earnings than United Overseas Bank. United Overseas Bank is trading at a lower price-to-earnings ratio than HDFC Bank, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares HDFC Bank and United Overseas Bank’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
HDFC Bank 18.32% 15.01% 1.55%
United Overseas Bank 32.33% 10.40% 1.07%

Insider & Institutional Ownership

17.3% of HDFC Bank shares are owned by institutional investors. Comparatively, 0.4% of United Overseas Bank shares are owned by institutional investors. 1.0% of HDFC Bank shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

HDFC Bank beats United Overseas Bank on 11 of the 14 factors compared between the two stocks.

HDFC Bank Company Profile

HDFC Bank Limited provides a range of banking and financial services to individuals and businesses in India, Bahrain, Hong Kong, and Dubai. The company operates in Treasury, Retail Banking, Wholesale Banking, and Other Banking Business segments. It accepts savings accounts, salary accounts, current accounts, fixed and recurring deposits, demat accounts, safe deposit lockers, and rural accounts, as well as offshore accounts and deposits. The company also offers personal, business, home, consumer durable, car, two wheeler, gold, educational, rural, and term loans; loans for professionals; loans against property, securities, and assets; overdrafts; government sponsored programs; and working capital, healthcare, channel, short term, structured, dealer, and vendor finance, as well as agricultural lending. In addition, it provides credit, debit, and prepaid cards; private banking services; export, import, remittance, bank guarantees, and letter of credit services, as well as merchant and cash management services; life, health, motor, travel, and home insurance products; and investment products, such as mutual funds, equities and derivatives, IPOs, and bonds. Further, the company offers bill discounting, real time gross settlement, bankers to right/public issue, forex, money market, employees trusts, and tax collection services; and investment banking services in the areas of project appraisal, structured finance, loan syndication, debt capital markets, equity placement, mergers and acquisitions, corporate advisory, and capital market advisory services. Additionally, it provides correspondent banking, settlement, custodial, disbursement, clearing, and administrative and fiduciary support services, as well as online and mobile banking services. As of March 31, 2018, the company operated a network of 4,787 branches and 12,635 ATMs in 2,691 cities/towns. HDFC Bank Limited was founded in 1994 and is based in Mumbai, India.

United Overseas Bank Company Profile

United Overseas Bank Limited provides financial products and services. The company's Group Retail segment provides deposits, insurance, card, wealth management, investment, and loan and trade financing products for personal and small enterprise customers. Its Group Wholesale Banking segment provides financing, trade, cash management, capital markets solutions, and advisory and treasury products and services. The company's Global Markets segment offers foreign exchange, interest rate, credit, commodities, equities, and structured investment products; and manages funds and liquidity. Its Other segment provides investment management, property, and insurance services. The company has a network of approximately 500 offices in 19 countries and territories in the Asia Pacific, Europe, and North America. The company was formerly known as United Chinese Bank and changed its name to United Overseas Bank Limited in 1965. United Overseas Bank Limited was founded in 1935 and is headquartered in Singapore.

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