Head to Head Analysis: Royal Bank of Scotland Group (RBS) and Banco de Chile (BCH)

Royal Bank of Scotland Group (NYSE: RBS) and Banco de Chile (NYSE:BCH) are both large-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, dividends, institutional ownership, earnings, valuation, profitability and analyst recommendations.

Risk & Volatility

Royal Bank of Scotland Group has a beta of 1.27, meaning that its share price is 27% more volatile than the S&P 500. Comparatively, Banco de Chile has a beta of 0.44, meaning that its share price is 56% less volatile than the S&P 500.

Profitability

This table compares Royal Bank of Scotland Group and Banco de Chile’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Royal Bank of Scotland Group 11.77% 7.04% 0.46%
Banco de Chile 25.06% 17.99% 1.75%

Valuation & Earnings

This table compares Royal Bank of Scotland Group and Banco de Chile’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Royal Bank of Scotland Group $19.56 billion 2.12 $1.78 billion $0.65 10.68
Banco de Chile $3.84 billion 4.06 $929.56 million $5.65 16.51

Royal Bank of Scotland Group has higher revenue and earnings than Banco de Chile. Royal Bank of Scotland Group is trading at a lower price-to-earnings ratio than Banco de Chile, indicating that it is currently the more affordable of the two stocks.

Dividends

Banco de Chile pays an annual dividend of $2.37 per share and has a dividend yield of 2.5%. Royal Bank of Scotland Group does not pay a dividend. Banco de Chile pays out 41.9% of its earnings in the form of a dividend. Banco de Chile has raised its dividend for 6 consecutive years.

Institutional & Insider Ownership

0.6% of Royal Bank of Scotland Group shares are held by institutional investors. Comparatively, 1.2% of Banco de Chile shares are held by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Royal Bank of Scotland Group and Banco de Chile, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Royal Bank of Scotland Group 0 7 5 0 2.42
Banco de Chile 2 3 1 0 1.83

Banco de Chile has a consensus target price of $86.33, indicating a potential downside of 7.44%. Given Banco de Chile’s higher probable upside, analysts clearly believe Banco de Chile is more favorable than Royal Bank of Scotland Group.

Summary

Banco de Chile beats Royal Bank of Scotland Group on 10 of the 16 factors compared between the two stocks.

Royal Bank of Scotland Group Company Profile

The Royal Bank of Scotland Group plc, together with its subsidiaries, provides banking and financial products and services to personal, commercial, corporate, and institutional customers worldwide. It operates through Personal & Business Banking, Commercial & Private Banking, RBS International, and NatWest Markets segments. The company offers savings and current accounts; secured personal loans, and business lending and asset-backed lending products; invoice financing and other financing products; and insurance products and credit cards. It also provides unitized fund, rate, portfolio management, payment, liquidity management, financial planning, and currency products. In addition, the company offers personal and business banking, commercial and private banking, wealth planning, investment management, risk management, and trading services to retail banking, mass affluent, small business, and high net worth customers. The Royal Bank of Scotland Group plc was founded in 1727 and is headquartered in Edinburgh, the United Kingdom.

Banco de Chile Company Profile

Banco de Chile provides various banking products and services to individuals, corporate clients, large companies, and small and medium-sized companies in Chile and internationally. The company operates through four segments: Retail, Wholesale, Treasury, and Subsidiaries. It offers checking accounts; personal, car, and mortgage loans; credit cards; credit lines; and investment products, such as fixed-term, automatic renewal, and tax benefit deposits, as well as stocks, portfolio management, voluntary retirement savings/mutual funds, foreign currency, and fixed income investment products. The company also provides insurance products and trust commissions, as well as financial consultancy services related to mergers and acquisitions, liabilities financing and restructuring, capital contribution, bonds and stocks emissions, and international business. In addition, it offers debt instruments; derivative contracts; and liquidity management, currency trading, foreign exchange transaction, international and treasury banking, securities brokerage, mutual fund and investment management, and securitization services, as well as payment management and collection services. Further, the company provides financing for importers and exporters; and factoring, leasing, express payment, electronic banking, and online payment services. It operates a network of approximately 423 branches and 1,453 ATMs. Banco de Chile was founded in 1855 and is headquartered in Santiago, Chile.

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