Societe Generale (OTCMKTS:SCGLY) and Banco Santander (NYSE:SAN) are both large-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, valuation, analyst recommendations, profitability, institutional ownership, earnings and risk.

Risk & Volatility

Societe Generale has a beta of 1.16, meaning that its stock price is 16% more volatile than the S&P 500. Comparatively, Banco Santander has a beta of 1.39, meaning that its stock price is 39% more volatile than the S&P 500.

Dividends

Societe Generale pays an annual dividend of $0.42 per share and has a dividend yield of 4.7%. Banco Santander pays an annual dividend of $0.23 per share and has a dividend yield of 4.4%. Societe Generale pays out 36.8% of its earnings in the form of a dividend. Banco Santander pays out 44.2% 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. Societe Generale is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a summary of current recommendations for Societe Generale and Banco Santander, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Societe Generale 1 1 1 0 2.00
Banco Santander 0 0 3 0 3.00

Banco Santander has a consensus target price of $6.20, suggesting a potential upside of 18.10%. Given Banco Santander’s stronger consensus rating and higher possible upside, analysts plainly believe Banco Santander is more favorable than Societe Generale.

Earnings & Valuation

This table compares Societe Generale and Banco Santander’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Societe Generale $27.06 billion 1.34 $3.17 billion $1.14 7.87
Banco Santander $54.66 billion 1.54 $7.48 billion $0.52 10.10

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

Institutional and Insider Ownership

0.6% of Societe Generale shares are owned by institutional investors. Comparatively, 1.6% of Banco Santander shares are owned by institutional investors. 9.5% of Banco Santander shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Societe Generale and Banco Santander’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Societe Generale 11.90% 10.08% 0.50%
Banco Santander 13.97% 7.55% 0.56%

Summary

Banco Santander beats Societe Generale on 12 of the 16 factors compared between the two stocks.

About Societe Generale

Société Générale Société anonyme provides financial services in Europe and internationally. It operates through three segments: French Retail Banking, International Retail Banking & Financial Services, and Global Banking and Investor Solutions. The company offers retail banking services to individual customers, professionals, and corporate and non-profit clients under the Societe Generale, Crédit du Nord, and Boursorama brands; and international retail banking and consumer credit services to individual and corporate customers in Europe, Russia, the Mediterranean Basin, and Sub-Saharan Africa. It also provides life, retirement savings scheme, personal protection, group retirement, dependence, annuity, auto and home, personal accident, school, individual personal protection, non-life, and other insurance products; vehicle leasing and fleet management services; and vendor and equipment finance services. In addition, the company assists corporates, financial institutions, public sector institutions, and family offices in terms of investments, strategic advisory, capital raising, and capital structure optimization; and offers structured finance, and investment and risk management solutions. Further, it provides access to market through solutions equities, fixed income and currencies, commodities, and alternative investments; private banking services, including asset allocation, portfolio management, funds, markets, and wealth management solutions to high net worth individuals; and asset management solutions. Additionally, the company offers securities services, such as clearing, custody and trustee, liquidity management, fund administration and asset servicing, fund distribution, and global issuer services. Société Générale Société anonyme was founded in 1864 and is based in Paris, France.

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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