Critical Review: Regions Financial (NYSE:RF) & Svenska Handelsbanken AB (publ) (OTCMKTS:SVNLY)

Regions Financial (NYSE:RF) and Svenska Handelsbanken AB (publ) (OTCMKTS:SVNLY) 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, earnings, dividends, risk, analyst recommendations and institutional ownership.

Insider & Institutional Ownership

79.4% of Regions Financial shares are owned by institutional investors. 0.3% of Regions Financial shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Regions Financial and Svenska Handelsbanken AB (publ), as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Regions Financial	1	12	5	0	2.22
Svenska Handelsbanken AB (publ)	0	0	0	0	N/A

Regions Financial presently has a consensus target price of $21.32, suggesting a potential downside of 6.33%. Given Regions Financial’s higher possible upside, equities analysts clearly believe Regions Financial is more favorable than Svenska Handelsbanken AB (publ).

Volatility and Risk

Regions Financial has a beta of 1.18, suggesting that its stock price is 18% more volatile than the S&P 500. Comparatively, Svenska Handelsbanken AB (publ) has a beta of 0.86, suggesting that its stock price is 14% less volatile than the S&P 500.

Dividends

Regions Financial pays an annual dividend of $0.96 per share and has a dividend yield of 4.2%. Svenska Handelsbanken AB (publ) pays an annual dividend of $0.38 per share and has a dividend yield of 7.7%. Regions Financial pays out 52.2% of its earnings in the form of a dividend. Svenska Handelsbanken AB (publ) pays out 55.1% 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. Regions Financial has raised its dividend for 11 consecutive years.

Profitability

This table compares Regions Financial and Svenska Handelsbanken AB (publ)’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Regions Financial	18.91%	12.64%	1.26%
Svenska Handelsbanken AB (publ)	14.98%	13.76%	0.75%

Earnings and Valuation

This table compares Regions Financial and Svenska Handelsbanken AB (publ)’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Regions Financial	$9.15 billion	2.28	$2.07 billion	$1.84	12.37
Svenska Handelsbanken AB (publ)	$16.45 billion	1.19	$2.74 billion	$0.69	7.16

Svenska Handelsbanken AB (publ) has higher revenue and earnings than Regions Financial. Svenska Handelsbanken AB (publ) is trading at a lower price-to-earnings ratio than Regions Financial, indicating that it is currently the more affordable of the two stocks.

Summary

Regions Financial beats Svenska Handelsbanken AB (publ) on 12 of the 16 factors compared between the two stocks.

About Regions Financial

Regions Financial Corporation, a financial holding company, provides banking and bank-related services to individual and corporate customers. It operates through three segments: Corporate Bank, Consumer Bank, and Wealth Management. The Corporate Bank segment offers commercial banking services, such as commercial and industrial, commercial real estate, and investor real estate lending; equipment lease financing; deposit products; and securities underwriting and placement, loan syndication and placement, foreign exchange, derivatives, merger and acquisition, and other advisory services. It serves corporate, middle market, and commercial real estate developers and investors. The Consumer Bank segment provides consumer banking products and services related to residential first mortgages, home equity lines and loans, consumer credit cards, and other consumer loans, as well as deposits. The Wealth Management segment offers credit related products, and retirement and savings solutions; and trust and investment management, asset management, and estate planning services to individuals, businesses, governmental institutions, and non-profit entities. It also provides investment and insurance products; low-income housing tax credit corporate fund syndication services; and other specialty financing services. The company was founded in 1971 and is headquartered in Birmingham, Alabama.

About Svenska Handelsbanken AB (publ)

Svenska Handelsbanken AB (publ) provides various banking products and services for private and corporate customers primarily in Sweden, the United Kingdom, Norway, the Netherlands, the United States, Luxembourg, Finland, and Poland. The company offers savings, transactions, business, currency, and investment accounts, as well as accounts for cash pool, and forestry and agriculture; mortgage and committed loans, and private loans; mutual funds; pension products; credit and debit cards; and payment and reconciliation services, as well as foreign exchange rate services. It also provides financing for investments, such as equipment, cars, computers, and other inventories, as well as vehicle and real estate financing services; green loans and advisor services; investment and other financing services; medical care, and group and health insurance products; forestry and farming banking products; and online and mobile banking services, as well as various banking services for children and young people. In addition, the company offers financial services, that includes asset management, transactional banking, corporate finance, financing, markets, trade finance, market information and research services to large corporations; cash management solutions; and various corporate banking services to small and medium-sized companies and large corporates, as well as private banking services. Svenska Handelsbanken AB (publ) was incorporated in 1871 and is headquartered in Stockholm, Sweden.