Critical Analysis: Banco Bradesco (NYSE:BBDO) & Credit Agricole (OTCMKTS:CRARY)

Credit Agricole (OTCMKTS:CRARY) and Banco Bradesco (NYSE:BBDO) are both large-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, earnings, dividends, risk, profitability, analyst recommendations and institutional ownership.

Earnings and Valuation

This table compares Credit Agricole and Banco Bradesco”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Credit Agricole	$31.76 billion	1.90	$8.00 billion	$1.20	8.29
Banco Bradesco	$41.79 billion	0.79	$4.24 billion	$0.39	8.03

Credit Agricole has higher earnings, but lower revenue than Banco Bradesco. Banco Bradesco is trading at a lower price-to-earnings ratio than Credit Agricole, indicating that it is currently the more affordable of the two stocks.

Dividends

Credit Agricole pays an annual dividend of $0.40 per share and has a dividend yield of 4.0%. Banco Bradesco pays an annual dividend of $0.03 per share and has a dividend yield of 1.0%. Credit Agricole pays out 33.3% of its earnings in the form of a dividend. Banco Bradesco pays out 7.7% 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.

Profitability

This table compares Credit Agricole and Banco Bradesco’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Credit Agricole	24.36%	24.26%	0.88%
Banco Bradesco	8.95%	14.15%	1.10%

Risk and Volatility

Credit Agricole has a beta of 0.66, indicating that its stock price is 34% less volatile than the S&P 500. Comparatively, Banco Bradesco has a beta of 0.59, indicating that its stock price is 41% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and price targets for Credit Agricole and Banco Bradesco, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Credit Agricole	0	4	1	0	2.20
Banco Bradesco	0	0	1	0	3.00

Insider and Institutional Ownership

0.6% of Credit Agricole shares are held by institutional investors. 0.3% of Banco Bradesco shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Credit Agricole beats Banco Bradesco on 9 of the 14 factors compared between the two stocks.

About Credit Agricole

Crédit Agricole S.A. provides retail, corporate, insurance, and investment banking products and services in France and internationally. It operates through French Retail Banking Regional Banks; French Retail Banking – LCL; International Retail Banking; Asset Gathering; Large Customers; and Specialised Financial Services segments. The company offers banking products and services, finance, savings, wealth management, payment, and cash flow management services; consumer finance products; savings/retirement, death and disability/creditor/group, and property and casualty insurance products; investment solutions; and banking and specialized financial services. It also provides investment banking, structured finance, international trade finance, commercial banking, capital market, and syndication services; financing solutions for property and equipment investment and renewal requirements; trade receivable financing and management solutions for corporates; asset servicing solutions for investment products, as well as various asset classes, such as execution, clearing, forex, security lending and borrowing, custody, depositary bank, fund administration, middle-office outsourcing solutions, and fund distribution support and issuer services; and online banking services. The company serves retail customers, corporates, banks and financial institutions, government agencies, and local authorities. Crédit Agricole S.A. was founded in 1894 and is headquartered in Montrouge, France. Crédit Agricole S.A. operates as a subsidiary of SAS Rue La Boetie.

About Banco Bradesco

Banco Bradesco S.A., together with its subsidiaries, provides various banking products and services to individuals, corporates, and businesses in Brazil and internationally. The company operates through two segments, Banking and Insurance. It provides current, savings, click, and salary accounts; real estate credit, vehicle financing, payroll loans, mortgage loans, microcredit, leasing, and personal and installment credit; overdraft and agribusiness loans; debit and business cards; financial and security services; consortium products; car, personal accident, dental, travel, and life insurance; investment products; pension products; foreign currency exchange services; capitalization bonds; and internet banking services. Banco Bradesco S.A. was founded in 1943 and is headquartered in Osasco, Brazil.