Financial Survey: Erste Group Bank (OTCMKTS:EBKDY) versus Commerzbank (OTCMKTS:CRZBY)

Erste Group Bank (OTCMKTS:EBKDY) and Commerzbank (OTCMKTS:CRZBY) are both large-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, valuation, risk, earnings, dividends, profitability and analyst recommendations.

Earnings & Valuation

This table compares Erste Group Bank and Commerzbank”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Erste Group Bank	$23.77 billion	2.20	$3.97 billion	$4.98	13.53
Commerzbank	$26.54 billion	1.80	$2.97 billion	$2.53	17.19

Erste Group Bank has higher earnings, but lower revenue than Commerzbank. Erste Group Bank is trading at a lower price-to-earnings ratio than Commerzbank, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Erste Group Bank and Commerzbank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Erste Group Bank	19.27%	10.96%	1.01%
Commerzbank	11.55%	7.69%	0.46%

Volatility and Risk

Erste Group Bank has a beta of 0.84, indicating that its stock price is 16% less volatile than the S&P 500. Comparatively, Commerzbank has a beta of 0.53, indicating that its stock price is 47% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Erste Group Bank and Commerzbank, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Erste Group Bank	0	3	3	1	2.71
Commerzbank	0	4	5	1	2.70

Institutional and Insider Ownership

0.4% of Erste Group Bank shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

Erste Group Bank pays an annual dividend of $0.27 per share and has a dividend yield of 0.4%. Commerzbank pays an annual dividend of $0.90 per share and has a dividend yield of 2.1%. Erste Group Bank pays out 5.4% of its earnings in the form of a dividend. Commerzbank pays out 35.6% 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.

Summary

Erste Group Bank beats Commerzbank on 10 of the 14 factors compared between the two stocks.

About Erste Group Bank

Erste Group Bank AG provides a range of banking and other financial services to retail, corporate, and public sector customers. The company operates through Retail, Corporates, Group Markets, Asset/Liability Management & Local Corporate Center, Savings Banks, and Group Corporate Center segments. It provides mortgage and consumer loans, investment products, current accounts, savings products, and credit cards, as well as cross selling products, such as leasing, insurance, and building society products. The company also offers factoring and accounts receivable purchasing; investment, acquisition and leveraged, project, and commercial real estate finance; interest rate and currency hedging, letters of credit, documentary collections, and guarantees; account management, payments, digital-banking, cash logistics, and payment factory and cash pooling services; documentary collection, equity interests and investments, revolving export credits lines, letters of credit, customer financing, and export guarantee; and loan syndication, and debt and equity capital market services. In addition, it provides cash management, trade finance, customer referral, markets execution, debt capital markets, and custody and brokerage services. Further, the company offers corporate finance; portfolio management; trading and market; trade execution, market making, and short-term liquidity management; and asset/liability management services, as well as working capital and bridge loans. It operates in Austria, the Czech Republic, Slovakia, Romania, Hungary, Serbia, Croatia, and internationally. The company was founded in 1819 and is headquartered in Vienna, Austria.

About Commerzbank

Commerzbank AG provides banking and capital market products and services to private and small business customers, corporate, financial service providers, and institutional clients in Germany, rest of Europe, the Americas, Asia, and internationally. It operates through two segments, Private and Small-Business Customers, and Corporate Clients. The company offers saving, checking, business, and current accounts; term deposits; pension; credit and debit cards; payment solutions; overdraft services; various loans; and insurance products. It also provides trade securities; treasury management; corporate financing; real estate financing; financing advisory; merger and acquisition; foreign trade; trade financing; asset and risk management; and online banking, as well as wealth management services. Commerzbank AG was founded in 1870 and is headquartered in Frankfurt am Main, Germany.