Sumitomo Mitsui Financial Grp (NYSE:SMFG) and BNP PARIBAS/S (OTCMKTS:BNPQY) are both large-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, valuation, risk, dividends, analyst recommendations, institutional ownership and earnings.

Risk and Volatility

Sumitomo Mitsui Financial Grp has a beta of 1.28, indicating that its share price is 28% more volatile than the S&P 500. Comparatively, BNP PARIBAS/S has a beta of 1.02, indicating that its share price is 2% more volatile than the S&P 500.

Dividends

Sumitomo Mitsui Financial Grp pays an annual dividend of $0.24 per share and has a dividend yield of 3.4%. BNP PARIBAS/S pays an annual dividend of $1.49 per share and has a dividend yield of 5.9%. Sumitomo Mitsui Financial Grp pays out 23.8% of its earnings in the form of a dividend. BNP PARIBAS/S pays out 44.1% 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.

Earnings and Valuation

This table compares Sumitomo Mitsui Financial Grp and BNP PARIBAS/S’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sumitomo Mitsui Financial Grp $52.05 billion 0.97 $6.93 billion $1.01 7.08
BNP PARIBAS/S $50.21 billion 1.25 $8.89 billion $3.38 7.42

BNP PARIBAS/S has lower revenue, but higher earnings than Sumitomo Mitsui Financial Grp. Sumitomo Mitsui Financial Grp is trading at a lower price-to-earnings ratio than BNP PARIBAS/S, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Sumitomo Mitsui Financial Grp and BNP PARIBAS/S’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sumitomo Mitsui Financial Grp 12.26% 6.51% 0.38%
BNP PARIBAS/S 17.70% 7.12% 0.34%

Analyst Recommendations

This is a breakdown of current ratings and target prices for Sumitomo Mitsui Financial Grp and BNP PARIBAS/S, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sumitomo Mitsui Financial Grp 0 1 0 0 2.00
BNP PARIBAS/S 0 2 0 0 2.00

Insider and Institutional Ownership

2.6% of Sumitomo Mitsui Financial Grp shares are held by institutional investors. Comparatively, 0.9% of BNP PARIBAS/S shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

BNP PARIBAS/S beats Sumitomo Mitsui Financial Grp on 7 of the 12 factors compared between the two stocks.

Sumitomo Mitsui Financial Grp Company Profile

Sumitomo Mitsui Financial Group, Inc., together with its subsidiaries, provides commercial banking, leasing, securities, consumer finance, and other services primarily in Japan. It operates through four segments: Wholesale Business, Retail Business, International Business, and Global Markets Business. The Wholesale Business segment provides financing, investment management, risk hedging and settlement services, as well as financial solutions for mergers and acquisition and other advisory services and leasing, primarily for large-and mid-sized corporate clients; and various leasing services, including equipment, and operating and leveraged leasing. The Retail Business segment offers wealth management, settlement services, consumer finance, and housing loans. The International Business segment provides loans, deposits, clearing services, trade finance, project finance, loan syndication, derivatives, and global cash management services; underwriting services; and leasing services related to the construction machinery, transportation equipment, industrial machinery, medical equipment, and aircraft leasing. As of March 31, 2018, this segment's network consisted of 18 branches, 22 sub-branches, and 4 representative offices. The Global Markets Business segment offers foreign exchange products, derivatives, bonds, stocks and other marketable financial products, and undertakes asset liability management operations. It also offers system development, data processing, management consulting, and economic research services; and investment advisory and investment trust management services. The company was founded in 1590 and is headquartered in Tokyo, Japan.

BNP PARIBAS/S Company Profile

BNP Paribas SA provides a range of banking and financial services in France and internationally. The company operates through two divisions, Retail Banking and Services; and Corporate and Institutional Banking. It offers long-term corporate vehicle leasing, and rental and other financing solutions; and digital banking and investment services, cash management, and factoring services to corporate clients, as well as wealth management services. The company also provides credit solutions for individuals under the Cetelem, Cofinoga, and Findomestic brand names; savings and protection solutions, including insuring individuals and their personal projects and assets; and asset management, private banking, and real estate services. In addition, it offers global market services, including investment, hedging, financing, and research across asset classes; security services comprising clearing, custody, and asset and fund services, as well as corporate trust, and market and financing services; and corporate trade and treasury, debt financing, specialized financing, strategic advisory, mergers and acquisition, and equity capital market services for institutional and corporate clients. The company was formerly known as Banque Nationale de Paris and changed its name to BNP Paribas SA in May 2000. BNP Paribas SA was founded in 1848 and is headquartered in Paris, France.

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