Contrasting Mitsubishi UFJ Financial Group (MUFG) and Banco Santander (SAN)

Mitsubishi UFJ Financial Group (NYSE:MUFG) and Banco Santander (NYSE:SAN) are both large-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, risk, analyst recommendations, earnings, valuation, profitability and institutional ownership.

Profitability

This table compares Mitsubishi UFJ Financial Group and Banco Santander’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Mitsubishi UFJ Financial Group 16.35% 6.56% 0.36%
Banco Santander 13.97% 7.55% 0.56%

Institutional and Insider Ownership

1.1% of Mitsubishi UFJ Financial Group shares are held by institutional investors. Comparatively, 1.6% of Banco Santander shares are held by institutional investors. 9.5% of Banco Santander shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility & Risk

Mitsubishi UFJ Financial Group has a beta of 1.67, indicating that its stock price is 67% more volatile than the S&P 500. Comparatively, Banco Santander has a beta of 1.33, indicating that its stock price is 33% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and price targets for Mitsubishi UFJ Financial Group and Banco Santander, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mitsubishi UFJ Financial Group 0 0 2 0 3.00
Banco Santander 0 1 2 0 2.67

Banco Santander has a consensus target price of $6.20, indicating a potential upside of 31.91%. Given Banco Santander’s higher probable upside, analysts plainly believe Banco Santander is more favorable than Mitsubishi UFJ Financial Group.

Earnings & Valuation

This table compares Mitsubishi UFJ Financial Group and Banco Santander’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Mitsubishi UFJ Financial Group $54.79 billion 1.47 $11.05 billion $0.71 8.52
Banco Santander $54.66 billion 1.38 $7.48 billion $0.52 9.04

Mitsubishi UFJ Financial Group has higher revenue and earnings than Banco Santander. Mitsubishi UFJ Financial Group is trading at a lower price-to-earnings ratio than Banco Santander, indicating that it is currently the more affordable of the two stocks.

Dividends

Mitsubishi UFJ Financial Group pays an annual dividend of $0.13 per share and has a dividend yield of 2.1%. Banco Santander pays an annual dividend of $0.12 per share and has a dividend yield of 2.6%. Mitsubishi UFJ Financial Group pays out 18.3% of its earnings in the form of a dividend. Banco Santander pays out 23.1% 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.

Summary

Mitsubishi UFJ Financial Group beats Banco Santander on 8 of the 15 factors compared between the two stocks.

About Mitsubishi UFJ Financial Group

Mitsubishi UFJ Financial Group, Inc., a bank holding company, provides financial services in Japan and internationally. Its Retail Banking Business Group segment offers a range of products and services, such as bank deposits, loans, asset management and administration services, investment products, and settlement services. This segment also provides annuity, single premium whole life, flat-rate premium whole life, medical, cancer, and nursing-care insurance products; testamentary trust services; housing loans; Internet banking services; and credit cards. The company's Corporate Banking Business Group segment provides loans and fund management, and remittance and foreign exchange services; securities businesses, syndicated loans, and structured finance; investment banking services; and transaction and trust banking services. Its Trust Assets Business Group segment offers asset management and administration services for products, such as pension trusts and security trusts. This segment also provides a range of services to corporate and other pension funds comprising pension fund management and administration, advice on pension schemes, and payment of benefits to scheme members. The company's Global Business Group segment offers project finance, export credit agency, and financing through asset-backed commercial papers; and investment banking services, such as debt and equity issuance and M&A advisory services, as well as consumer finance, investment, asset management, and other financial products and services to individuals, large corporations, financial institutions, and sovereign and multinational organizations. Its Global Markets Business Group segment offers financing, hedging, and investing solutions to retail, corporate, institutional, and governmental customers; and asset and liability management services. Mitsubishi UFJ Financial Group, Inc. was founded in 1880 and is headquartered in Tokyo, Japan.

About Banco Santander

Banco Santander, S.A., together with its subsidiaries, provides various retail and commercial banking products and services for individual and corporate clients worldwide. It offers demand and time deposits, and current and savings accounts; certificates of deposit; mortgages, auto finance, and personal loans; working capital finance; and debit and credit cards, as well as life and non-life insurance products. The company also provides cash management, trade finance, custody and securities, and securitization services; corporate loans; capital market products; and syndicated corporate finance services. In addition, it is involved in the corporate banking, treasury, and investment banking activities; fixed income and equity derivatives; trading and hedging derivatives; and brokerage of equities. Further, the company offers asset management, private banking, and processing services, as well as mobile and online banking services. It operates through a network of 13,697 branches. The company was formerly known as Banco Santander Central Hispano S.A. and changed its name to Banco Santander, S.A. in June 2007. Banco Santander, S.A. was founded in 1856 and is headquartered in Madrid, Spain.

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