GRUPO AVAL ACCI/S (NYSE:AVAL) and KB Financial Group (NYSE:KB) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, risk, valuation, institutional ownership, profitability, analyst recommendations and dividends.

Dividends

GRUPO AVAL ACCI/S pays an annual dividend of $0.31 per share and has a dividend yield of 4.1%. KB Financial Group pays an annual dividend of $1.47 per share and has a dividend yield of 3.1%. GRUPO AVAL ACCI/S pays out 51.7% of its earnings in the form of a dividend. KB Financial Group pays out 19.8% 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. KB Financial Group has raised its dividend for 2 consecutive years.

Institutional & Insider Ownership

21.5% of GRUPO AVAL ACCI/S shares are held by institutional investors. Comparatively, 5.8% of KB Financial Group shares are held by institutional investors. 69.0% of KB Financial Group shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares GRUPO AVAL ACCI/S and KB Financial Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
GRUPO AVAL ACCI/S 9.22% 8.56% 0.92%
KB Financial Group 22.13% 9.81% 0.75%

Analyst Recommendations

This is a summary of current ratings for GRUPO AVAL ACCI/S and KB Financial Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
GRUPO AVAL ACCI/S 0 2 0 0 2.00
KB Financial Group 0 1 0 0 2.00

GRUPO AVAL ACCI/S currently has a consensus target price of $9.00, suggesting a potential upside of 18.58%. KB Financial Group has a consensus target price of $61.00, suggesting a potential upside of 29.73%. Given KB Financial Group’s higher probable upside, analysts clearly believe KB Financial Group is more favorable than GRUPO AVAL ACCI/S.

Earnings and Valuation

This table compares GRUPO AVAL ACCI/S and KB Financial Group’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
GRUPO AVAL ACCI/S $7.02 billion 0.38 $657.60 million $0.60 12.65
KB Financial Group $13.29 billion 1.42 $3.10 billion $7.43 6.33

KB Financial Group has higher revenue and earnings than GRUPO AVAL ACCI/S. KB Financial Group is trading at a lower price-to-earnings ratio than GRUPO AVAL ACCI/S, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

GRUPO AVAL ACCI/S has a beta of 0.55, meaning that its stock price is 45% less volatile than the S&P 500. Comparatively, KB Financial Group has a beta of 1.25, meaning that its stock price is 25% more volatile than the S&P 500.

Summary

KB Financial Group beats GRUPO AVAL ACCI/S on 11 of the 15 factors compared between the two stocks.

About GRUPO AVAL ACCI/S

Grupo Aval Acciones y Valores S.A. provides a range of financial services and products to public and private sector customers in Colombia and Central America. The company's deposit products and services include checking accounts, savings accounts, and time deposits, as well as other deposits consisting of deposits from correspondent accounts, cashier checks, and collection services. It also provides loan products, such as commercial loans that comprise general purpose loans, working capital loans, loans funded by development banks, corporate credit cards, and overdraft loans; consumer loans comprising personal loans, automobile and other vehicle loans, credit cards, overdrafts, loans funded by development banks, and general purpose loans; microcredit loans; and mortgage loans. In addition, the company offers pension and severance fund management services; and trust, bonded warehousing and brokerage transactions, real estate escrow, merchandise and document storage and deposit, customs agency, cargo management, surety bond and merchandise distribution, bancassurance, and payment and collection services, as well as engages in deposit and lending operations in foreign currencies. Further, it is involved in merchant and investment banking activities; trading activities that include fixed income trading, and derivatives and foreign exchange operations, as well as the provision of treasury, pension plan administration, investment fund advice, financial advisory, leasing, private banking, and insurance services. As of December 31, 2017, the company operated through a network of 1,421 branches and 3,781 ATMs in Colombia; and 350 branches and 1,993 ATMs in Central America. Grupo Aval Acciones y Valores S.A. was founded in 1994 and is based in Bogotá, Colombia.

About KB Financial Group

KB Financial Group Inc., a financial holding company, provides a range of banking and related financial services to consumers and corporations in South Korea and internationally. It operates through Corporate Banking, Retail Banking, Other Banking Services, Securities Business, Non-life Insurance Business, Credit Card Business, and Life Insurance Business segments. The company offers deposit and credit products and services, and other related financial services to large, small, medium-sized enterprises and SOHOs, and individuals and households; and engages in trading in securities and derivatives, funding, and other supporting activities. It also provides investment banking, brokerage, and other supporting services; property and life insurance; and credit sale, cash service, and card loan services. In addition, the company offers foreign exchange transaction; financial investment; credit card and installment finance; security investment trust management and advisory; financial leasing; real estate trust management; capital investment; collection of receivables or credit investigation; software advisory, development, and supply; investment advisory and securities dealing; claim; management; asset-backed securitization; investment trust; trust asset management; and real estate services. KB Financial Group Inc. was founded in 2008 and is headquartered in Seoul, South Korea.

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