Contrasting Wells Fargo & Company (NYSE:WFC) & Societe Generale Group (OTCMKTS:SCGLY)

Societe Generale Group (OTCMKTS:SCGLY) and Wells Fargo & Company (NYSE:WFC) are both large-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, risk, dividends, institutional ownership, analyst recommendations, earnings and valuation.

Dividends

Societe Generale Group pays an annual dividend of $0.32 per share and has a dividend yield of 2.0%. Wells Fargo & Company pays an annual dividend of $2.00 per share and has a dividend yield of 2.4%. Societe Generale Group pays out 16.5% of its earnings in the form of a dividend. Wells Fargo & Company pays out 29.1% 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. Wells Fargo & Company has raised its dividend for 4 consecutive years. Wells Fargo & Company is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

1.0% of Societe Generale Group shares are owned by institutional investors. Comparatively, 75.9% of Wells Fargo & Company shares are owned by institutional investors. 0.1% of Wells Fargo & Company shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Societe Generale Group and Wells Fargo & Company, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Societe Generale Group	1	4	3	1	2.44
Wells Fargo & Company	0	9	14	2	2.72

Wells Fargo & Company has a consensus target price of $99.08, indicating a potential upside of 20.72%. Given Wells Fargo & Company’s stronger consensus rating and higher possible upside, analysts clearly believe Wells Fargo & Company is more favorable than Societe Generale Group.

Profitability

This table compares Societe Generale Group and Wells Fargo & Company’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Societe Generale Group	23.30%	7.20%	0.36%
Wells Fargo & Company	17.55%	13.85%	1.06%

Volatility & Risk

Societe Generale Group has a beta of 0.77, meaning that its stock price is 23% less volatile than the S&P 500. Comparatively, Wells Fargo & Company has a beta of 0.92, meaning that its stock price is 8% less volatile than the S&P 500.

Valuation & Earnings

This table compares Societe Generale Group and Wells Fargo & Company”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Societe Generale Group	$30.83 billion	1.96	$6.79 billion	$1.94	8.29
Wells Fargo & Company	$123.53 billion	2.01	$21.34 billion	$6.88	11.93

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

Summary

Wells Fargo & Company beats Societe Generale Group on 16 of the 18 factors compared between the two stocks.

About Societe Generale Group

Société Générale Société anonyme provides banking and financial services to individuals, corporates, and institutional clients in Europe and internationally. It operates through French Retail Banking, International Retail Banking & Financial Services, and Global Banking and Investor Solutions. It offers retail banking services, such as consumer credit, vehicle leasing and fleet management, online banking, wealth management, and equipment and vendor finance services; and insurance products, including home, vehicle, family, health, and mortgage insurance. The company also provides corporate and investment banking, securities, business consulting, consumer finance, advisory and financing, and asset management and private banking services. In addition, it offers brokerage, cash management, payment, factoring/reverse factoring, export financing, trade finance, cash clearing and correspondent banking, and receivables and supply chain financing services. Société Générale Société anonyme was incorporated in 1864 and is headquartered in Paris, France.

About Wells Fargo & Company

Wells Fargo & Co. is a diversified and community-based financial services company, which engages in the provision of banking, insurance, investments, mortgage, and consumer and commercial finance products and services. It operates through the following segments: Consumer Banking and Lending, Commercial Banking, Corporate and Investment Banking, and Wealth and Investment Management. The Consumer Banking and Lending segment offers consumer and small business banking, home lending, credit cards, auto, and personal lending. The Commercial Banking segment provides banking and credit products across industry sectors and municipalities, secured lending and lease products, and treasury management. The Corporate and Investment Banking segment is composed of corporate banking, investment banking, treasury management, commercial real estate lending and servicing, and equity and fixed income solutions, as well as sales, trading, and research capabilities. The Wealth and Investment Management segment refers to personalized wealth management, brokerage, financial planning, lending, private banking, trust, and fiduciary products and services. The company was founded by Henry Wells and William G. Fargo on March 18, 1852 and is headquartered in San Francisco, CA.