Head to Head Analysis: RHB Capital Bhd. (OTCMKTS:RHBAF) and Swedbank (OTCMKTS:SWDBY)

RHB Capital Bhd. (OTCMKTS:RHBAF) and Swedbank (OTCMKTS:SWDBY) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, risk, institutional ownership, analyst recommendations, earnings, profitability and dividends.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for RHB Capital Bhd. and Swedbank, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RHB Capital Bhd.	0	0	0	0	0.00
Swedbank	2	3	1	0	1.83

Dividends

RHB Capital Bhd. pays an annual dividend of $0.16 per share and has a dividend yield of 13.4%. Swedbank pays an annual dividend of SEK 1.48 per share and has a dividend yield of 3.7%. RHB Capital Bhd. pays out 20.2% of its earnings in the form of a dividend. Swedbank pays out 50.2% 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. RHB Capital Bhd. is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares RHB Capital Bhd. and Swedbank”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RHB Capital Bhd.	N/A	N/A	N/A	$0.81	1.51
Swedbank	$11.08 billion	4.01	$3.35 billion	SEK 2.95	13.41

Swedbank has higher revenue and earnings than RHB Capital Bhd.. RHB Capital Bhd. is trading at a lower price-to-earnings ratio than Swedbank, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

4.4% of RHB Capital Bhd. shares are held by institutional investors. 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.

Profitability

This table compares RHB Capital Bhd. and Swedbank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
RHB Capital Bhd.	N/A	N/A	N/A
Swedbank	29.45%	14.84%	0.99%

Summary

Swedbank beats RHB Capital Bhd. on 8 of the 11 factors compared between the two stocks.

About RHB Capital Bhd.

RHB Capital is the ultimate holding company for the RHB Banking Group of companies. It has been listed on the Main Market of Bursa Malaysia Securities Berhad since 29 December 1994. The Group is involved in commercial banking, Islamic banking, investment banking, stock broking, leasing, offshore banking, offshore trust services, general insurance, unit trust management, asset management/nominee and custodian services.

About Swedbank

Swedbank AB (publ) provides various banking products and services to private and corporate customers in Sweden, Estonia, Latvia, Lithuania, Norway, the United States, Finland, Denmark, Luxembourg, and China. The company operates through three business areas: Swedish Banking, Baltic Banking, and Corporates and Institutions. It offers savings accounts, mutual funds and insurance savings, pension savings, institutional asset management, and other savings and investment products; private residential lending, consumer financing, corporate lending, leasing, and other financing products, as well as trade finance and factoring services; and current accounts, cash handling, debit and credit cards, and card acquiring, as well as domestic, international, mobile, document, and other payment products. The company also provides equity trading, structured products, corporate finance, custody services, fixed income and currency trading, and other capital market products; and administrative services, treasury operations, real estate brokerage and management services, legal services, safe deposit boxes, and other services. In addition, it offers pension insurance and plan, life, endowment insurance, and personal insurance products; investment management, investment banking, and mortgage lending services; and transaction banking services comprising cash management, securities, account, and clearing and settlement services, as well as Internet and mobile banking services. The company was formerly known as ForeningsSparbanken AB and changed its name to Swedbank AB (publ) in September 2006. Swedbank AB (publ) was founded in 1820 and is headquartered in Sundbyberg, Sweden.